Simply two weeks after Tractor Supply Company reported record full-year sales and earnings plus introduced a 30 % enhance in its dividend, the agricultural life-style retailer is making waves once more by asserting the most important acquisition within the firm’s 83-year historical past.
In an all-cash transaction valued at $297 million, the Tennessee-based retailer announced it has acquired Orscheln Farm and Residence together with 167 shops situated in 11 states, spanning Ohio to Oklahoma.
The deal caps a exceptional first yr for CEO Hal Lawton that started in January 2020, slammed instantly into the pandemic earlier than rebounding, retooling, including 80 shops, $2 billion in income in addition to a 65 % enhance within the inventory value alongside the best way.
Immediately, with the inventory at an all-time excessive and a $20 billion market cap, the previous Macy’s govt not solely has some respiration room, however some very clear momentum and wind at his again.
“That is an thrilling step for Tractor Provide as we broaden our footprint within the Midwest with the high-quality property of Orscheln Farm and Residence,” Lawton stated within the firm’s press assertion. “We stay up for bringing collectively our extremely complementary cultures and groups to comprehend the long-term worth and advantages that we count on this acquisition to ship.”
An Encore To This autumn
Earlier than touchdown in Brentwood, Tenn. 13 months in the past, Lawton spent the previous 20 years at Macy’s, eBay, Residence Depot and McKinsey and has wasted no time making his mark since taking the helm in his current position.
Praising the exemplary effort of the corporate’s 42,000 associates, Lawton advised traders that working the enterprise at elevated charges had enabled Tractor Provide to ship fourth-quarter comparable retailer gross sales development of 27 %, in comparison with the prior yr after they have been flat.
“Going ahead, we consider our resilient enterprise mannequin with a differentiated and dependable buyer base, our strategic investments to seize development alternatives and the power of our stability sheet place us to capitalize on the momentum in our enterprise in 2021 and past,” he stated.
Even so, Lawton advised analysts on the corporate’s current convention name that it’ll take not less than till fall earlier than there may be some return to normalcy and that there’s as a lot uncertainty this yr as there was in 2020.
In line with Mary Pilkington, senior vice chairman, investor relations and public relations, the corporate is planning use its momentum and continue to grow with plans so as to add one other 80 Tractor Supply areas this yr, in addition to 10 extra Petsense shops.
“2020 was a exceptional yr for Tractor Provide,” Pilkington stated in an e mail to PYMNTS, noting that extra prospects than ever shopped at Tractor Provide Firm, they usually additionally spent extra money per basket dimension than ever earlier than. “We continued to achieve market share and profit from structural / macro components like journey consolidation, rural revitalization, pet possession and homesteading,” she added.
Timing Is Every part
In line with CFO Kurt Barton, who has labored at Tractor Provide since 1999, the corporate’s report monetary efficiency has come at a time when more and more homebound U.S. customers have turned to Tractor Provide to purchase every thing from UTVs (utility terrain automobiles), to yard hearth pits, backyard instruments in addition to feed and provides for pets and home-raised livestock.
“This yr was like no different within the historical past of Tractor Provide,” Barton stated on the decision, pointing to macro developments that had labored in its favor.
“This pattern additionally contains residing a extra self-reliant life-style,” he added. “The adoption of recent hobbies like yard poultry, looking, gardening and hen feeding have continued and we consider these hobbies and developments have gotten extra ingrained in our buyer’s habits.”
With a portfolio that now consists of over 1,900 Tractor Provide shops, practically 200 Petsense pet meals areas, some 20 distinct manufacturers, a non-public label bank card in addition to a thriving eCommerce enterprise and increasing pet wellness and drugs unit, it may very well be stated that greener pastures lie forward for Tractor Provide.