Tractor Supply (TSCO) Stock Forecast & Price Target

Tractor Supply has demonstrated a significant increase in total sales per store, which rose from approximately $4.5 million in 2019 to about $6.5 million, indicating effective growth strategies and improved store performance. The company has reported broad-based growth in sales driven by strength in consumable, usable, and edible (CUE) products as well as seasonal goods, with a notable comp gain of 1.5% achieved despite weather-related challenges earlier in the year. Furthermore, stronger-than-expected performance in big ticket sales and the ongoing expansion of both new stores and remodeled locations support a positive outlook for continued revenue growth and market penetration.

Tractor Supply is experiencing a projected operating margin contraction of approximately 20 basis points to 9.7%, driven by declining retail sales in the broader building materials and garden supply sector, which saw a year-over-year decrease of 3.6%. Additionally, while the company benefits from easier year-over-year comparisons in 3Q24, the anticipated further uptick in tariff-related inflation poses potential risks to consumer spending, which may detract from the company's revenue streams. Overall, sustained interest rate increases could undermine home affordability and housing turnover, further pressuring Tractor Supply's operational performance amidst shifting consumer preferences towards services rather than goods.