Tractor Supply Company

This is our first report on Tractor Supply Company, a major rural lifestyle retailer in the U.S. catering to recreational farmers and ranchers. This company thrives despite difficult economic climates, with stable revenue growth and profits. It delivered a mixed quarter, missing out on the revenue expectations of analysts but managing an earnings beat. Positive sales comps came from every part of the U.S. and they benefited from their retail base’s geographic diversity. The South Atlantic and Mid-Atlantic regions also performed well. Numerous secular trends continue to be favorable for their addressable market. Besides, they are also increasing their market share, both, in-store and online. During the quarter, Tractor improved its in-store mode and added an app feature called My Pet. Furthermore, the improvements in the company’s year-round categories made up for the reductions in its late spring to summer seasonal goods and big-ticket categories. This quarter, Neighbor’s Club also maintained its assistance in moving clients up in spending. We initiate coverage on the stock of Tractor Supply Company with a ‘Hold’ rating.