For Tractor Supply, It's Clear Skies Ahead

| About: Tractor Supply (TSCO)
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The Tractor Supply Company Has the Right Stuff

Tsc logo w_line

The Tractor Supply Company (NASDAQ: TSCO) is a retail company that lives up to their motto: "The Stuff You Need Out Here."

A big part of their ability to have "what you need" is their very savvy use of weather and climate intelligence to anticipate the future needs of their customers.

Weather is a huge driver of demand for a large percentage of TSCO's merchandise assortments and they are market leaders when it comes to:

  1. understanding historically how the weather influences demand of their products on a regional basis and,
  2. using forward looking weather information to inform their planning, allocation, and markdown decisions.

Does it work?

Note the press from Thursday, as they announced better than expected earnings for 2008 during the worst consumer-led recession since (at least) WWII.

Tractor Supply 2008, 2009 EPS view above Street

Jan 22 (Reuters) - Retail farm and ranch supplies retailer Tractor Supply Co forecast financial-year 2008 and 2009 earnings above expectations, sending its shares up more than 8 percent.

And, note the article (These Cold-Weather Stocks Are Hot) from The

As the temperature across a large portion of the U.S. turns from cold to colder, some stocks start to warm up and benefit from the brutal shift in weather.

Tractor Supply Company: In the company's first-quarter 2008 conference call, CEO Jim Wright said the following regarding last winter's weather: "We generated stronger-than-expected sales during the first quarter. Our team executed well at the store level and took advantage of the cold weather opportunity."

He also said: "We were deliberate in our markdown strategy on winter-related merchandise, which produced a solid sell-through" He said the trend should continue through the cold weather.

Tractor Supply operates retail farm and ranch stores in the U.S. The company offers various products for the agricultural and rural lifestyles, including hardware, power equipment, trucks, towing products and footwear. Currently, it operates 834 stores in 44 states, with an average store size of 16,600 square feet.

And the outlook for Spring?

With TSCO you can bet they will be fully stocked with "the stuff you need out here" no matter the weather. Given that, and based on my expectation of much better spring weather this year as compared to last year, TSCO is heading into 2009 with clear skies and a following wind.

Disclosure: WMT, M