Tractor Supply Gains 22.8% in a Year: Buy or Hold the Stock?

Core Viewpoint - Tractor Supply Company (TSCO) has shown strong performance with a stock gain of 22.8% over the past year, significantly outperforming the Retail - Miscellaneous industry's growth of 2.7% [1] Group 1: Growth Strategies - TSCO is integrating physical and digital operations to enhance consumer shopping experiences, supported by its omnichannel investments [2] - The company is focusing on curbside pickup, same-day and next-day delivery, and has launched a new mobile app to improve digital capabilities [3] - The Neighbor's Club membership program has surpassed 38 million members, contributing to 80% of sales, indicating strong customer retention [4] Group 2: Strategic Initiatives - Major initiatives under the Life Out Here strategy include Project Fusion and Garden Center rollouts, which are enhancing space productivity and localization capabilities [5] - TSCO has acquired Allivet, an online pet pharmacy, expanding its presence in the pet wellness sector, and has formed a licensing partnership with Field & Stream for outdoor products [6] Group 3: Financial Performance and Valuation - TSCO's stock is currently trading at a price/earnings ratio of 25.96, higher than the industry average of 17.65 and its five-year median of 22.88 [8] - The Zacks Consensus Estimate for 2025 sales is $15.68 billion, reflecting a year-over-year growth of 5.4$2.17, indicating a 6.4% increase [12] Group 4: Challenges - Despite growth, TSCO faces challenges from rising selling, general and administrative (SG&A) expenses, cost inflation, and a sluggish retail sales environment [9][10]