Tractor Supply Company’s (TSCO) strong operational execution facilitated it to raise its domestic store growth target by approximately 19% to 2,500 from 2,100 stores. The company also increased its long-term operating-margin goal by 100 basis points to 11.5%.
The news provided much impetus to the stock which hit a new 52-week high of $90.49 yesterday, before eventually closing at $89.06.
Management expects the company’s growth initiatives, including expansion of store base along with efforts to improve product assortment, inventory management and pricing efficiency, to boost sales and margins in the long term.
We notice Tractor Supply recently opened its 1,400th store in Eunice, LA. The company currently operates in all of the U.S. states except Alaska. In 2014, Tractor Supply opened 107 stores in 31 states and had 1,382 stores in 49 states, as of Dec 27, 2014.
Further, Tractor Supply recently reported solid fourth-quarter 2014 results, wherein both top and bottom lines increased year over year.
The company’s earnings per share of 81 cents for the quarter were 19.1% higher and sales of $1,584.3 million marked a 12% rise from $1,415.1 million in the prior-year quarter.
Results benefited mainly from strong sales driven by improved comparable-store sales, increase in operating margin and lower expenses as a percentage of sales.
We believe this Zacks Rank #2 (Buy) company will continue to maintain its sales growth momentum as it continues to progress with its initiatives of expanding store base and incorporating technological advancements to serve clients better.
Other Stocks to Consider
Better-ranked stocks in the same industry include Build-A-Bear Workshop Inc. (BBW), CST Brands Inc. (CST) and Marinemax Inc. (HZO), all carrying a Zacks Rank #1 (Strong Buy).
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