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Tractor Supply Extends Revionics Deal for Strategic Pricing

Zacks

Moving ahead on its path of optimizing pricing, Tractor Supply Company TSCO announced the extension of its multi-year deal with Revionics Inc. through 2019.

Revionics is a leading company that provides price optimization solutions to retailers, based on consumer behavior. The company currently has over 62,000 retailers using its services for more than 18 million products. Revionics enables retailers to efficiently implement data-driven omnichannel merchandising plans that in turn are aimed at boosting financial performance, alongside enhancing consumer experience.

Tractor Supply and Revionics bonded in 2010, when the former first licensed “Revionics Price Suite”. Thereafter, Tractor Supply also used ‘Revionics Markdown Suite’ and ‘Revionics Advanced Analytics’, thus increasing its usage of Revionics’ products. These products are likely to be beneficial, given their ability to offer the most efficient pricing opportunities.

Further, over the years, Tractor Supply executed miscellaneous pricing strategies across the country, as it gained tangible experience in using Revionics Price Suite. Moreover, the company remained committed to pricing tactfully to meet customers’ needs and improving customer loyalty, while achieving business targets simultaneously. This kind of pricing also helps Tractor Supply to analyze the sales trends at its stores, and price according to the location and fashion.

These initiatives, along with other strategic efforts have helped Tractor Supply to witness comparable store sales (comps) growth and store expansion over the years. Evidently, in the last reported quarter, comps rose 4.9%, backed by both traffic and ticket. Coming to store expansion, Tractor Supply introduced 36 new stores in first-quarter 2016 and is on track to open 115–120 outlets in 2016.

The company’s other growth initiatives include its focus on managing inventories to minimize the impact of weather on its business and capitalize on seasonal demand. With regard to this, Tractor Supply concentrates on enhancing IT systems and supply chain. Also, it is on track with its constant investments in new systems, including demand planning, improved pricing, inventory allocation, all of which are directed toward generating supply chain efficiencies to better manage global inventories.

Clearly, the extension of its contract with Revionics highlights Tractor Supply’s aforementioned focus on improving pricing. Going forward, the company remains on track to make more efficient usage of Revionics’ products to further augment business and return on investment.

The stock closed at $92.41 yesterday, jumping 10.9% on a year-to-date basis.

TRACTOR SUPPLY Price

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Zacks Rank

Tractor Supply currently carries a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same industry include Cabela's Incorporated CAB, Marinemax Inc. HZO and ULTA Salon, Cosmetics & Fragrance, Inc. ULTA, each carrying a Zacks Rank #2 (Buy).

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