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Tractor Supply (TSCO) to Build Frankfort Distribution Center


In a bid to catch up with the growing digital world, Tractor Supply Company TSCO began the construction of a distribution center in Frankfort, NY. This is also in sync with its expansion strategy. The facility, with an expected size of 930,500 square feet, is anticipated to begin operations by the end of 2018. Located in the Frankfort 5S South Business Park, this facility is anticipated to create over 350 new full-time jobs in more than six years.

The construction of this New York facility is crucial for further expansion in the Northeast Corridor of the country. Further, this facility will aid in satisfying the company’s urge to deliver products to customers quickly and efficiently, by catering to its digital fulfillment strategy.

This new Frankfort facility will mark the company’s eighth distribution center in the country, when it opens doors in late 2018. Currently, Tractor Supply operates seven distribution centers in various locations including Casa Grande, AZ; Franklin, KY; Hagerstown, MD; Macon, GA; Pendleton, IN; Waco, TX; and Waverly, NE. These distribution centers efficiently cater to the fulfillment needs of the company’s 1,630 stores across 49 states.

This new distribution center reinforces our view that Tractor Supply is well on track with growth initiatives, which include expansion of store base and incorporation of technological advancements to induce traffic and drive the top line. Tractor Supply leverages an extensive network of stores to penetrate into target markets, which in turn, enables it to generate healthy sales and gain market share. Evidently, the company remains on track to attain its long-term domestic store growth target of 2,500 stores.

Further, the company is focused on integrating physical and digital operations to offer consumers a seamless shopping experience. In this regard, it remains on track with its “One Tractor” initiative that is aimed at connecting store and online shopping.

However, shares this Zacks Rank #4 (Sell) company have plunged 26.8% on a year-to-date basis, underperforming the industry's drop of 9.9%. This is mainly attributable to the recent dismal earnings and sales trends.

Stocks to Consider

Meanwhile, investors interested in the same industry can count of better-ranked stocks like Build-A-Bear Workshop, Inc. BBW, Five Below, Inc. FIVE and Sally Beauty Holdings, Inc. SBH, all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Build-A-Bear with long-term EPS growth rate of 22.5%, has delivered an average positive earnings surprise of 73.7% in the trailing four quarters.

Five Below flaunts a splendid earnings surprise history with an average beat of 6.3% in the trailing four quarters. Further, the company has grown 8.6% in the last one month and has a long-term EPS growth rate of 28.5%.

Sally Beauty has grown 7.6% in the last one month. The stock also has long-term EPS growth rate of 5.6%, while estimates have trended up in the last seven days.

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