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Tractor Supply is bringing its full catalog to the Uber marketplace, allowing customers to order bulky items like animal feed and power tools for immediate delivery. This nationwide rollout covers almost every store in the chain's network.
This is a smart move for a company that serves rural and suburban customers who often have to drive long distances for supplies. By using Uber's drivers, Tractor Supply can offer the convenience of home delivery without the massive cost of building its own fleet of delivery trucks. It helps the company protect its lead in the rural market as more shopping moves online.
Source: Business Wire
Existing home sales fell again in October as high borrowing costs kept buyers away. For Tractor Supply, a slow housing market is a headwind because people who aren't moving into new homes tend to spend less on big projects like new fencing, lawn equipment, or outbuildings. While much of the company's revenue comes from essential needs like livestock feed, these larger discretionary purchases are what drive its profit growth.
Source: Reuters
The board of directors approved a quarterly dividend of $0.24 per share. This is a routine payment for the rural retailer, which has consistently returned cash to its owners. For a long-term holder, this confirms the company's cash position remains steady enough to support its current payout while it continues to invest in expanding its pet health and veterinary services.
Source: Business Wire
After Tractor Supply reported its October results, we updated our fair value and cut our quality score to 2.9. We moved our rating to Watch and now expect profit margins to stay between 8.0% and 8.3% for the full year. We added two things to what we track: the cost of closing 74 pet specialty stores and the money the company is spending to buy pet pharmacy and service businesses. We also reset our projections for sales at stores open more than a year and for how much profit the company makes on its investments.
Tractor Supply earned 43 cents per share this quarter, beating the 41 cents analysts expected. Total sales rose about 5 percent to $3.91 billion. While sales at stores open at least a year grew by a modest 0.4 percent, this comes on top of much stronger growth from the same time last year. Management noted that their focus on pet supplies and digital tools is starting to win more business.
The stock rose nearly 5 percent on the news, even as the broader market fell. This suggests that the company is successfully navigating a period of heavy investment in new stores. By keeping its full-year outlook unchanged, the company is signaling that its rural-focused model remains steady despite a tougher environment for many other retailers.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Management has struggled to set a reliable bar, missing their own profit targets in five of the last eight quarters as rural spending remains difficult to predict.
| Expectation | |
|---|---|
| EPS | $0.40 |
| Revenue | $4.03B |
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