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Tractor Supply (TSCO)
NASDAQ:TSCO
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Tractor Supply
(NASDAQ:TSCO)77Outperform
Positive Factors
Customer Engagement
The 'Chick Days' promotions have consistently attracted new customers, leading to increased sales of live birds.
Sales Performance
High frequency data indicates Q1 comparable sales are currently running ahead of consensus, with a colder January and February helping on top of the poultry pop.
Negative Factors
Financial Performance
The average Q4'24 transaction value and ticket decline indicate a weaker than expected financial performance.
Profitability
The '25 EBIT margin guidance implies a '25 EBIT margin of 9.8% at the midpoint, which is below consensus estimates.
Tractor Supply (TSCO) vs. S&P 500 (SPY)
Market Cap
$29.21B
Dividend Yield1.63%
Average Volume (3M)5.35M
Price to Earnings (P/E)26.9
Beta (1Y)0.82
Revenue Growth2.25%
EPS Growth1.00%
CountryUS
Employees52,000
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)2.04
Shares Outstanding531,548,340
10 Day Avg. Volume4,842,797
30 Day Avg. Volume5,345,676
Financial Highlights & Ratios
PEG Ratio27.06
Price to Book (P/B)N/A
Price to Sales (P/S)1.96
Price to Cash Flow (P/CF)14.10
P/FCF Ratio13.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$59.00Price Target Upside3.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
Tractor Supply Business Overview & Revenue Model
Company DescriptionTractor Supply Company (TSCO) is the largest rural lifestyle retailer in the United States, catering primarily to recreational farmers, ranchers, and other rural residents. The company operates a chain of retail stores offering a wide range of products including livestock feed, pet supplies, agricultural equipment, hardware, and seasonal goods. With a focus on serving the needs of rural communities, Tractor Supply provides essential products for farm and ranch maintenance, pet care, and home improvement.
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 demonstrates strong financial performance with consistent revenue and profit growth, effective cost management, and robust cash flows. The balance sheet is solid, though increasing leverage is a concern that needs monitoring.Income Statement
Tractor Supply has demonstrated consistent revenue growth over the past years, with a notable increase from $8.35 billion in 2019 to $14.88 billion in 2024. The gross profit margin remains strong, consistently above 35%, indicating effective cost management. The EBIT and EBITDA margins are stable, reflecting operational efficiency. However, the net profit margin has shown slight volatility, primarily due to increased operating expenses and financing costs.85
Very Positive
Balance Sheet
The company's balance sheet shows a healthy equity base with a consistent increase in stockholders' equity from $1.57 billion in 2019 to $2.27 billion in 2024. The debt-to-equity ratio has increased over the years, indicating higher leverage, which could pose risks if interest rates rise. The equity ratio remains stable, showing the company's ability to cover its liabilities. Overall, the balance sheet is robust but with caution due to rising debt levels.75
Positive
Cash Flow
Tractor Supply's cash flow from operations has grown steadily, supporting its capital expenditures and resulting in positive free cash flow. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to profits. The free cash flow to net income ratio shows that the company maintains good liquidity. However, there are fluctuations in financing cash flow due to varying debt issuance and repayment activities.80
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
Positive
56.89
Price Trends
54.92
Positive
55.45
Positive
54.78
Positive
Market Momentum
0.09
Positive
57.70
Neutral
37.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSCO, the sentiment is Positive. The current price of 56.89 is above the 20-day moving average (MA) of 55.70, above the 50-day MA of 54.92, and above the 200-day MA of 54.78, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 37.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSCO.
Tractor Supply Risk Analysis
Tractor Supply disclosed 36 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $29.21B | 26.93 | 49.83% | 1.63% | 2.25% | 1.00% | |
75 Outperform | $21.21B | 20.09 | 5.74% | 3.26% | 1.27% | ― | |
74 Outperform | $124.41B | 20.32 | 27.91% | 1.29% | -20.93% | -34.33% | |
70 Outperform | $1.41B | 20.85 | 14.32% | 1.10% | -7.17% | -0.53% | |
61 Neutral | $56.16M | ― | -23.75% | ― | -9.51% | 83.29% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
53 Neutral | $6.83B | 46.40 | -10.11% | 1.27% | -19.08% | -136.41% |
* Consumer Cyclical Sector Average
Performance Comparison
TSCO
Tractor Supply
56.89
7.59
15.40%
AGCO
Agco
102.70
-6.17
-5.67%
DE
Deere
499.62
131.07
35.56%
FARM
Farmer Brothers Company
2.68
-1.05
-28.15%
LNN
Lindsay
132.01
18.37
16.17%
TSN
Tyson Foods
61.24
8.85
16.89%
Tractor Supply Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -0.07% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment with significant achievements in financial performance, customer engagement, and strategic investments. However, these are tempered by challenges such as modest sales growth, deflation impacts, and operating margin pressures.Highlights
Record Financial Performance
For the fiscal year 2024, Tractor Supply achieved record financial results with net sales of nearly $14.9 billion, growing 2.2% versus 2023. Diluted earnings per share were a record $2.04 on a split-adjusted basis.
Digital Sales Milestone
Tractor Supply's digital business reached another year of record sales, topping over $1.1 billion.
Strong Customer Engagement
Customer metrics hit all-time highs with record low frontline team member attrition, record high total active customer accounts, and high-value customer retention. Neighbor's Club membership exceeded 38 million, representing 80% of sales.
Expansion and Investment
In 2024, Tractor Supply opened 80 new Tractor Supply stores and 11 Petsense stores, funded by a record $1.4 billion in operating cash flow. Additionally, the company acquired Allivet, expanding its market reach.
Positive Outlook for 2025
Tractor Supply is forecasting strong net sales growth of 5% to 7% and comp sales performance of 1% to 3% for 2025, expecting moderation of headwinds and continued market share gains.
Lowlights
Modest Sales Growth
In the fourth quarter, net sales grew only 3.1% with comparable store sales increasing by 0.6%, indicating a challenging retail environment.
Impact of Deflation
Deflation had an estimated 100 basis point drag on comp sales performance in the fourth quarter, affecting commodity-based product categories.
Operating Margin Decline
Fourth quarter operating margin declined 69 basis points to 8.4% due to growth investments, higher depreciation, and modest deleverage of fixed costs.
Headwinds from Weather and Deflation
The warm weather in November and December negatively impacted winter seasonal business, and deflation pressure continued to affect sales in key product categories.
Company Guidance
In the recent Tractor Supply Company call, the company provided a comprehensive outlook for 2025, highlighting several key metrics and strategic initiatives. The company anticipates a strong net sales growth of 5% to 7%, with comparable store sales expected to increase between 1% and 3%. For the fiscal year 2024, Tractor Supply reported net sales of nearly $14.9 billion, marking a 2.2% growth compared to 2023, with a comparable store sales increase of 0.2%. The company achieved a record operating cash flow of $1.4 billion and returned over $1 billion to shareholders for the fourth consecutive year. The digital business also reached a new high, surpassing $1.1 billion in sales. Looking forward, Tractor Supply plans to open approximately 90 new stores and 10 Petsense stores in 2025, supported by strategic investments, including a new distribution center in Idaho. The company is also integrating Allivet, a recent acquisition expected to add over $100 million in net sales, into its Neighbor's Club, which now boasts over 38 million members.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.