Tractor Supply Company TSCO inked a multi-year deal with American Kennel Club in a bid to support dog owners of all breeds. Being one of the world’s largest pure bred dog registry, American Kennel’s association will help its customers access food, treats, toys, bedding and other accessories from Tractor Supply’s stores.
American Kennel’s customers will be notified about Tractor Supply’s offerings through emails, newsletters and promotions on AKC.TV digital streaming channel. Post the completion of this deal, Tractor Supply will become the Official Rural Lifestyle Partner of American Kennel.
Apart from pet products, the company provides essential items to customers. Further, the company offers convenient shopping facilities, including Buy Online/Pick Up In-Store, Same Day/Next Day Delivery, Curbside Pickup, Autoship and Free Standard Delivery. These options are accessible for customers who shop for $49 or more.
The company has been witnessing increased sales across its product categories, channels and geographic regions amid the ongoing coronavirus pandemic that led to robust comparable store sales (comps) growth in the first quarter of 2020. Further, the company had a strong start to the second quarter with solid demand for its products and services. Moreover, its online business is seeing improvement since the beginning of second-quarter 2020, driven by higher demand as customers opt for the newly-launched contactless curbside delivery and buy online, pickup at store options.
In a bid to meet the growing demand, Tractor Supply unveiled a redesigned e-commerce website along with a new mobile application, which will simplify the online purchasing process for consumers and enable it to better introduce digital capabilities in the market.
Encouragingly, net sales are expected to increase 24-29% year over year for second-quarter 2020. Comps are anticipated to rise 20-25% in the same time period. We note that this Zacks Rank #3 (Hold) stock has surged 57.7% in the past three months, outperforming the industry’s growth of 56.1%.
However, the company continues to face COVID-19 impacts, which led to nearly $7 million of incremental costs in the first quarter. Management withdrew its 2020 guidance. Going ahead, the company expects to witness elevated costs of about $30-$50 million in the second quarter related to appreciation bonus for its frontline team members, increased store labor and higher safety and cleaning costs.
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