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Tractor Supply (TSCO)
NASDAQ:TSCO
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Tractor Supply
(NASDAQ:TSCO)
73Outperform
Positive Factors
Customer Engagement
Chick Day events are successfully driving traffic from both core and new customers, contributing to increased market share in feed categories.
Market Position
Tractor Supply Company is a best-in-class, well positioned retailer in terms of market served, competitive advantages and long-term earnings potential.
Strategic Initiatives
The company is mitigating the impacts of deflation and macroeconomic uncertainty through strategic initiatives, including reducing reliance on imports from China.
Negative Factors
Margin Pressure
There are weaker second quarter outlook and weaker second half gross margin expectations.
Near-term Challenges
Near-term pressures, such as deflation and uncertainty around growth reacceleration, are deemed to outweigh long-term positioning, leading to an Underperform rating.
Uncertainty and Risks
The uncertainty of tariffs and the potential for weaker consumer demand make the required acceleration in TSCO SSS growth seem risky.
Tractor Supply (TSCO) vs. S&P 500 (SPY)
Market Cap
$27.12B
Dividend Yield1.73%
Average Volume (3M)5.83M
Price to Earnings (P/E)25.5
Beta (1Y)0.62
Revenue Growth2.07%
EPS Growth-2.13%
CountryUS
Employees52,000
SectorConsumer Cyclical
Sector Strength61
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.34
Shares Outstanding531,615,400
10 Day Avg. Volume6,869,233
30 Day Avg. Volume5,834,578
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.26
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.32
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$55.11Price Target Upside7.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering22
Tractor Supply Business Overview & Revenue Model
Company DescriptionTractor Supply Company operates as a rural lifestyle retailer in the United States. The company offers a selection of merchandise, including equine, livestock, pet, and small animal products necessary for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products, such as heating products, lawn and garden items, power equipment, gifts, and toys; work/recreational clothing and footwear; and maintenance products for agricultural and rural use. It provides its products under the 4health, Producer's Pride, American Farmworks, Red Shed, Bit & Bridle, Redstone, Blue Mountain, Retriever, C.E. Schmidt, Ridgecut, Countyline, Royal Wing, Dumor, Strive, Groundwork, Traveller, Huskee, Treeline, JobSmart, TSC Tractor Supply Co, Paws & Claws, and Untamed brands. As of June 25, 2022, it operated 2,016 Tractor Supply stores in 49 states; and 178 Petsense stores in 23 states. The company operates its retail stores under the Tractor Supply Company, Del's Feed & Farm Supply, and Petsense names; and operates websites under the TractorSupply.com and Petsense.com names. It sells its products to recreational farmers, ranchers, and others. The company was founded in 1938 and is based in Brentwood, Tennessee.
How the Company Makes MoneyTractor Supply Company generates revenue primarily through the sale of its diverse product offerings in its retail stores and through its e-commerce platform. The company benefits from a broad customer base that includes hobby farmers, livestock and pet owners, and rural homeowners, leading to consistent demand for its products. Key revenue streams include sales of livestock and pet products, hardware and tools, clothing and footwear, and seasonal outdoor items. In addition to product sales, Tractor Supply also leverages its Neighbor's Club loyalty program to enhance customer engagement and drive repeat purchases. Strategic partnerships with vendors and a focus on private label brands help Tractor Supply optimize its product assortment and margins, further contributing to its profitability.
Tractor Supply Financial Statement Overview
Summary
Tractor Supply shows strong revenue growth and profitability margins with a healthy cash flow. However, high leverage and a slight decline in net profit margins pose risks.Income Statement
Tractor Supply has shown consistent revenue growth over recent years, with a TTM revenue of $14.96 billion, slightly up from $14.88 billion the previous year. Gross profit margin stands at approximately 34.8% for TTM, indicating strong profitability. However, the net profit margin for TTM has slightly decreased to 7.2% compared to prior periods, which could be an area of concern. Nevertheless, EBIT and EBITDA margins remain robust at 9.7% and 12.8% respectively.82
Very Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of approximately 2.57 in TTM, which indicates significant leverage. However, the equity ratio of around 21.6% suggests a reasonable level of financial stability. Return on equity for TTM is strong at 48.4%, indicating efficient use of equity to generate profits.75
Positive
Cash Flow
Operating cash flow to net income ratio is healthy at 1.28, showing strong cash conversion. Free cash flow has decreased slightly over the periods, but still represents a positive cash flow to net income ratio of 0.57 for TTM. This indicates effective cash management despite slight declines in free cash flow growth.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 14.88B | 14.56B | 14.20B | 12.73B | 10.62B | Gross Profit |
| 5.40B | 5.23B | 4.97B | 4.48B | 3.76B | EBIT |
| 1.47B | 1.48B | 1.43B | 1.31B | 996.93M | EBITDA |
| 1.91B | 1.87B | 1.78B | 1.58B | 1.21B | Net Income Common Stockholders |
| 1.10B | 1.11B | 1.09B | 997.11M | 748.96M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 251.49M | 397.07M | 202.50M | 878.03M | 1.34B | Total Assets |
| 9.81B | 9.19B | 8.49B | 7.77B | 7.05B | Total Debt |
| 5.42B | 5.04B | 4.27B | 3.92B | 3.54B | Net Debt |
| 5.17B | 4.64B | 4.07B | 3.04B | 2.20B | Total Liabilities |
| 7.54B | 7.04B | 6.45B | 5.76B | 5.13B | Stockholders Equity |
| 2.27B | 2.15B | 2.04B | 2.00B | 1.92B |
| Cash Flow | Free Cash Flow | |||
| 636.79M | 580.15M | 583.61M | 510.29M | 1.10B | Operating Cash Flow |
| 1.42B | 1.33B | 1.36B | 1.14B | 1.39B | Investing Cash Flow |
| -643.92M | -653.07M | -1.09B | -627.34M | -292.21M | Financing Cash Flow |
| -922.50M | -486.39M | -938.78M | -975.11M | 155.21M |
Tractor Supply Technical Analysis
Neutral
51.30
Price Trends
52.28
Negative
53.54
Negative
54.29
Negative
Market Momentum
-0.30
Negative
50.61
Neutral
83.06
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSCO, the sentiment is Neutral. The current price of 51.3 is above the 20-day moving average (MA) of 50.53, below the 50-day MA of 52.28, and below the 200-day MA of 54.29, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 50.61 is Neutral, neither overbought nor oversold. The STOCH value of 83.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSCO.
Tractor Supply Risk Analysis
Tractor Supply disclosed 35 risk factors in its most recent earnings report. Tractor Supply reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tractor Supply Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $14.92B | 13.50 | 40.08% | 2.36% | 3.53% | 13.86% | |
75 Outperform | $15.79B | 42.44 | 101.78% | ― | 6.40% | 891.13% | |
74 Outperform | $16.70B | 19.76 | 19.19% | 3.43% | 1.99% | -32.18% | |
73 Outperform | $27.12B | 25.48 | 49.62% | 1.73% | 2.07% | -2.13% | |
70 Outperform | $62.84B | 25.32 | -14.95% | ― | 4.72% | 4.69% | |
61 Neutral | $6.69B | 11.69 | 3.01% | 3.94% | 2.60% | -21.51% | |
59 Neutral | $14.12B | 15.81 | 31.63% | 5.47% | -4.43% | -24.58% |
* Consumer Cyclical Sector Average
Performance Comparison
TSCO
Tractor Supply
51.30
-2.17
-4.06%
AZO
AutoZone
3,663.73
725.81
24.70%
BBY
Best Buy Co
68.85
-2.71
-3.79%
DKS
Dick's Sporting Goods
190.88
0.60
0.32%
GPC
Genuine Parts Company
117.42
-35.38
-23.15%
CHWY
Chewy
39.57
23.47
145.78%
Tractor Supply Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 1.12%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with record sales and strong customer metrics contrasted by challenges such as a decline in comparable store sales, delayed spring impact, and pressures on big ticket items. The company remains resilient and focused on managing through tariff-related uncertainties and maintaining customer engagement. However, lowered earnings expectations and macroeconomic uncertainties create a cautious outlook.Q1-2025 Updates
Positive Updates
Record Sales Achieved
Total sales reached a record $3.47 billion, marking an increase of 2.1% despite the softer than expected start to the year.
Strong Customer Metrics
Robust transaction growth of 2.1%, strong unit growth in consumable categories, positive new customer counts, and record retention of existing customers.
Increased Dividend and Share Repurchase
Tractor Supply increased its dividend by 4.5%, marking the sixteenth consecutive year of growth, and increased share repurchase authorization by an incremental $1 billion.
Resilience in Core Categories
Strong performance in core categories such as consumables and heating fuels, with heating fuel up over 20%.
Successful Chick Days Event
Chick Days event on pace to deliver record-breaking results with strong engagement from core and new customers.
Negative Updates
Decline in Comparable Store Sales
Comparable store sales declined 0.9% due to a decline in average ticket of 2.9%.
Impact of Delayed Spring
Spring categories in the South were down about 30%, with a delay in spring weather causing a headwind of about 250 basis points.
Pressure on Big Ticket Items
Big ticket categories like riding lawn mowers and outdoor power equipment faced pressure, with riding lawn mowers down about 25%.
Tariff-Related Uncertainties
The macroeconomic environment has become more uncertain, with tariff costs expected to create pressure on the cost base.
Lowered Earnings Expectations
Diluted earnings per share was 34¢, below expectations, and net income decreased 9.5% to $179.4 million.
Company Guidance
During the Tractor Supply Company's first-quarter 2025 conference call, the company provided updated guidance reflecting the macroeconomic uncertainty and weather-related challenges impacting their performance. Despite a record $3.47 billion in total sales, comparable store sales declined by 0.9%, with diluted earnings per share at 34¢. The company has revised its fiscal year outlook, anticipating net sales growth of 4% and comparable store sales ranging from flat to up 4%. Operating margin is expected between 9.5% and 9.9%, with net income projected between $1.07 and $1.17 billion, translating to earnings per share of $2 to $2.18. For the second quarter, Tractor Supply forecasts net sales growth of 3% to 4% and comparable store sales between flat and up 1%, with earnings per diluted share of 79¢ to 81¢. The guidance incorporates the impact of tariffs, evolving consumer sentiment, and extended cold weather affecting spring sales. The company emphasized their strategic focus on maintaining market share, managing costs, and leveraging their resilient business model amid these challenges.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.