Tractor Supply Continues Rural America Domination, Says Analyst

Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Tractor Supply Co TSCO with a price target of $250.
Tractor Supply reported a strong 4Q22, with EPS of $2.43, beating the consensus and an impressive comp of 8.6%.
The analyst said Ticket was up 6.3% and transactions (proxy for traffic) were up 2.3%.
By category, sales were best in CUE (consumable, usable, edible), winter seasonal, and year-round product categories, added the analyst.
The gross margin improved 28 bps to 34.0% on higher pricing and benefits from operational initiatives.
Tractor Supply also provided 2023 EPS guidance of $10.30-$10.60, up 6.1%-9.2% YoY, reflecting continued strength in the business and the acquisition of Orchseln Farm and Home, which closed on October 12, the analyst mentioned.
Overall, Tractor Supply continues to execute at a high level and dominate in rural America, said the analyst.
The company's high mix of essentials (over 50% of sales) and strategic initiatives, including the addition of side lot lawn & garden centers in over 300 stores, Project Fusion comprehensive remodel program in nearly 30% of the 2,066 Tractor Supply stores, increased focus on pets should continue to fuel growth and market share gains, noted the analyst.
The better-than-expected total sales reflect continued momentum and the benefit from further remodels and side lot transformations, as well as 70 new Tractor Supply stores and 10-15 new Petsense stores, added the analyst.
Price Action: TSCO shares are trading higher by 4.51% at $223.46 on the last check Thursday.
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