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Tractor Supply CEO: ‘We Are Significantly Outpacing the Industry’

Tractor Supply is riding a growth streak throughout the pandemic.

The rural lifestyle retailer has seen its fortunes rise while others like former rival Stock + Field, a onetime wholesaler of Under Armour, Carhartt and Wrangler, fell on hard times. So much so that CEO Hal Lawton told Wall Street analysts Thursday that “2021 was record year for our business as we successfully comped our record performance in 2020.”

Nearly one year ago, Tractor Supply broadened its footprint by acquiring Orscheln Farm and Home and its 167-store base across 11 states including Illinois, Kansas and Texas. The company’s fourth-quarter comp store sales jumped 12.7 percent annually and 40 percent over 2019, Lawton said on Thursday’s earnings call.

In fact, Carhartt’s expanding relationship with the seller of farm goods like animal feed, tools and outdoor equipment testifies to the Brentwood, Tenn.-based company’s strength and influence, especially in complementary categories like apparel and footwear. Tractor Supply is on track to add 75 to 80 new stores this year, expanding the 2,003 locations it operated to kick off 2021 after crossing the 2,000-store threshold last year.

“Beginning with our first store in Minot, Tractor Supply Company established a commitment to meeting and exceeding the needs of our customers, and we have upheld that commitment for more than 80 years,” Lawton said in a statement, adding that the company has expanded “far beyond” what founder Charles E. Schmidt, Jr. “could have ever imagined.”

Tractor Supply recently announced the first of three new distribution centers opening in the next five years. It’s also making a bigger play for apparel through the multiyear Project Fusion store remodel initiative focused on enhancing layouts and expanding assortments.

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“Apparel is running at comps above 35 percent, with high single-digit lift as compared to control stores,” chief merchandising officer Seth Estep, speaking on Thursday’s conference call, said of the Fusion stores’ impact. “This is a category that gets an immediate response from the consumer and the lifts have been sustained over time. We believe this is attributed to the visual impact post conversion, updated space allocations of categories and brands as well as the expansion of women’s with brands like Carhartt, Ariat and Wrangler. Apparel is now a key customer mission for people to come to Tractor Supply.”

In addition to national brands including, Dickies, the Timberland Pro Series, Wrangler, Lee, Ariat, Ridgecut Toughwear, Berne Workwear and Blue Mountain, Tractor Supply carries apparel under its own TSC label. Estep reiterated the positive trends the company is seeing with clothing sales, adding, “those are things that we’re really looking to attack.”

Omnichannel investments seem to be paying off as well for the company, which also owns the 177-store Petsense pet goods chain. “Our e-commerce growth continues to accelerate with 2-year CAGR of 80 percent in our digital channel, forming a larger part of our growth that we have ever seen before and new and expanding categories in lawn and garden, grilling, [and] apparel,” chief financial officer Kurt Barton told investors.

“We believe we are significantly outpacing the industry in our growth and continuing to gain market share both online and in store,” Lawton added.