Tractor Supply Company (TSCO Quick QuoteTSCO - Free Report) has been a go-to stock, owing to the smooth execution of its Life Out Here Strategy and healthy consumer trends. The company is on track to build up its Out Here lifestyle assortment and convenient shopping format to gain customers and market share. Sturdy demand for everyday merchandise, including consumable, usable and edible products as well as robust summer seasonal categories have been the key drivers.

The Zacks Rank #2 (Buy) company has a market capitalization of $25.3 billion. In the past year, TSCO has rallied 51.8% against the industry’s decline of 4.2%. It also compares favorably with the Retail-Wholesale sector’s decline of 12.5% and the S&P 500 index’s growth of 24.3%.

In the past 30 days, the company’s estimates for 2021 earnings per share have been unchanged. For fiscal 2021, its earnings estimates are pegged at $8.51 per share, suggesting 23.9% growth from the year-ago period’s reported figure.

Image Source: Zacks Investment Research

What Does the Strategy Hold?

Tractor Supply’s Life Out Here Strategy is essentially based on five key pillars, which include customers, digitization, execution, team members and total shareholder return. As part of the Life Out Here Strategy, the company also provided long-term financial growth targets for three to five years after the normalizing of macro conditions from the impacts of the COVID-19 pandemic.

Management envisions achieving net sales growth of 6-7%, while comps are expected to grow 4-5%. Further, the operating margin is anticipated to be 9-9.5% and earnings per share are likely to grow 8-10%.

Additionally, the company launched the Field Activity Support Team (“FAST”) and is implementing various technology and service enhancements across the enterprise. It is also in the initial phase of transforming its side lots and mature stores to improve space productivity, bringing the latest merchandising strategies to life, and advancing efforts to remain nationally strong and locally relevant.

What’s More?

Tractor Supply is focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. The company remains on track with the ‘ONETractor’ strategy, which is aimed at connecting stores and online shopping. The company’s omni-channel investments, including curbside pickup, same-day, next-day delivery, a re-launched website and a new mobile app, contributed to digital sales growth in the third quarter.

The company witnessed continued momentum in e-commerce, with double-digit sales growth of more than 40%. Its mobile app has more than 2 million downloads and accounts for above 10% of e-commerce sales. The company is gaining share across all its categories.

In addition, the Neighbor’s Club loyalty program remains sturdy, with a year-over-year sales increase of 20%. Tractor Supply exited the third quarter with more than 22 million Neighbor’s Club members. The members are spending about three times the rate of non-members, with the Neighbor’s Club members presently representing roughly 70% of the sales. The number of high-value per customers of this program rose about 30% in the quarter.

Tractor Supply is persistently focusing on its growth initiatives, including expanding its store base and incorporating technological advancements to induce traffic and drive the top line. The company is well-positioned to expand the store base, remaining on track to increase its domestic store to 2,500 in the long term.

The Project Fusion is the company’s state-of-the-art space productivity program built to enrich customer experience in the mature store base. Management expects to have 15% of its overall store base in the new Fusion layout by the end of 2021.

Another key component of the company’s space productivity initiatives is the transformation of its Side Lot. It anticipates completing 150 Side Lots by the end of 2021. The company’s Project Fusion and Side Lot model transformations have been significant investments toward stores. The store investments target to achieve higher market share and boost productivity across the existing and new stores.

Other Key Picks in Retail

Some other top-ranked stocks are Ulta Beauty (ULTA Quick QuoteULTA - Free Report) , Boot Barn Holdings (BOOT Quick QuoteBOOT - Free Report) and Canada Goose (GOOS Quick QuoteGOOS - Free Report) .

Ulta Beauty, a leading beauty retailer in the United States, sports a Zacks Rank #1 (Strong Buy) at present. The stock has rallied 40.9% in the past year. It has an expected EPS growth rate of 16.5% for three-five years.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ulta Beauty’s current financial-year sales and earnings per share (EPS) suggests growth of 39.8% and 268%, respectively, from the year-ago period’s corresponding figures. ULTA has a trailing four-quarter earnings surprise of 76%, on average.

Boot Barn, a lifestyle retailer of western and work-related footwear, apparel and accessories, currently flaunts a Zacks Rank of 1. BOOT has a trailing four-quarter earnings surprise of 35.3%, on average. Shares of BOOT have surged 176.3% in a year.

The Zacks Consensus Estimate for Boot Barn’s current-year sales and EPS suggests growth of 54.6% and 188%, respectively, from the year-ago period’s corresponding figures. BOOT has an expected EPS growth rate of 20% for three-five years.

Canada Goose, a luxury apparel retailer in Canada, the United States, Asia, Europe, and internationally, presently sports a Zacks Rank #1. GOOS has a trailing four-quarter earnings surprise of 83.4%, on average. The stock has rallied 18.4% in the past year.

The Zacks Consensus Estimate for Canada Goose’s current-year EPS suggests growth of 73.8% from the year-ago reported level. GOOS has an expected EPS growth rate of 31% for three-five years.