Tractor Supply's Offering Continues to Resonate With Consumer, Helping Protect Profitability

Tractor Supply is the largest consumer farm specialty retailer in the United States, set to achieve more than $13 billion in annual sales in 2022. The firm has differentiated itself through its products and customer demographics, which provide underlying support to its brand intangible assets and a narrow economic moat. At the end of 2021, the store base had grown about 26% over the prior five-year period, to more than 2,000 locations (around 2,200 including Petsense), driving sales and EPS compound annual growth rates over the past three years of 17% and 26%, respectively. We forecast that the firm will grow to around 2,900 stores by 2031 as it populates big-box centers in the western half of the U.S., with Petsense accounting for about 280 units.