Rural-lifestyle retail chain Tractor Supply is the IBD Stock of the Day. Tractor Supply stock cleared a handle buy point during Thursday's session, but the breakout fizzled as market sold off.
The move for the retailer — which sells lawn mowers, farming equipment, tools, pet supplies and an array of other outdoor goods — follows gains that management has attributed to a wave of pet adoptions and a migration out of cities during the pandemic. Customers include hobby farmers, contractors and homeowners in the exurbs and rural areas.
Tractor Supply Stock
Shares of Tractor Supply edged up 0.2% to 233.37 in the stock market today. Intraday, TSCO stock hit a record 241.54, clearinh a handle buy point of 236.73. That handle formed after the stock moved above an entry of 226.41 in a double-bottom base. Tractor Supply stock on Thursday once again closed in the 5% buy zone from that 226.41 entry.
TSCO stock has a 95 Composite Rating. Its EPS Rating is 93. Shares are up by roughly one-third over the past 12 months.
The company in January reported fourth-quarter results that beat expectations. Same-store sales climbed 12.7%. Tractor Supply at the time also forecast sales of $13.6 billion to $13.8 billion for its fiscal 2022, with earnings per share of $9.20 to $9.50. It said it expected same-store sales gains of 3% to 4.5%.
'Substantially Stronger'
FactSet currently forecasts sales of $13.8 billion and earnings per share of $9.40. It sees same-store sales growth of 3.8%.
"Today, our business is substantially stronger than before the pandemic," CEO Hal Lawton said in the Tractor Supply earnings release. Tractor Supply stock rose after the results, but later sold off in February with the broad market.
The company could face tough comparisons up ahead, after marching higher since 2020. FactSet's forecast for a 3.8% same-store sales gain this year would follow a 16.9% increase last year and a 23.1% jump in 2020. Wall Street forecasts 4% same-store sales growth for 2023.
Tractor Supply was founded in 1938. It started out selling tractor parts and farming equipment, Lawton said at a conference this month. The retailer later expanded into selling animal feed, pet food and garden supplies.
During that conference, hosted by an analyst who covers Tractor Supply stock, Lawton said inflation could help sales, and that it had been able to pass on those increases to consumers without sacrificing generally low prices. Amid the world's ongoing supply-chain troubles, he said the company was trying to strengthen its inventories and network of distribution centers.
"Now, there's no doubt when you walk (into) our stores you'd find a category here or there a little spotty," Lawton said. "But the things that customers really shop for are animal feed, pet food, garden, et cetera. We are bit in stock the whole time. We're committed to staying in stock."
