Many millennials are leaving densely populated urban centers to settle in more rural communities, and the relocation trend has been a boon for Tractor Supply, CEO Hal Lawton told The Washington City Times Monday.
“We’ve gained market share from our core customer, as well as the new customer, the Millennial Customer,” Lawton said in a one-on-one with Jim Cramer on “Mad Money”. “We are really seeing a revitalization of the countryside led by millennials.”
After years of facing obstacles to entering the housing market, the Millennials, who are between the ages of 25 and 40, have emerged in recent years as a large share of first-time homebuyers. It has led to increased demand for pet, poultry, gardening and self-reliance products, Lawton said.
“We saw a 4-point change in sales penetration with the millennial cohort last quarter,” he said.
Tractor Supply, which operates nearly 2,000 stores and has 42,000 employees, posted first-quarter results Thursday that were much stronger than expected. The farm equipment supplier, valued at $ 22 billion, saw same-store sales increase 39%, contributing to $ 2.79 billion in revenues and earnings of $ 1.55 per share. Sales were up 53% from pre-pandemic levels.
“There are definitely structural trends driving our business that we think have a long-term trend,” Lawton said.
The stock closed at $ 190.95 on Monday, up 6% since the company reported. Tractor Supply also increased its outlook for the year.