Why tractor stocks fell today

Shares of the retail chain Tractor delivery (TSCO -5.00%) fell on Thursday after the company released its third-quarter 2024 earnings results. Tractor Supply shares were down 5% as of 1 p.m. EST.

Stable business but no growth

Tractor Supply has nearly 2,300 stores across the U.S. where you can buy garden supplies, animal feed and more. Demand is steady, but not necessarily growing at the moment. The company’s third-quarter revenue rose nearly 2% year-over-year to $3.5 billion, helped by the opening of several new locations. However, same-store sales fell 0.2%.

Analysts were hoping for slightly better sales for Tractor Supply. However, the company performed well in terms of profitability. Gross margin improved from less than 37% in the same period last year to just over 37% in the third quarter. And although net profit fell by 5% to USD 242 million, it was slightly better than analysts’ expectations.

Still, it’s hard for investors to get excited about Tractor Supply stock today due to its lack of growth.

Patience with tractor stocks may be rewarded

Tractor Supply management isn’t putting its lackluster growth into retirement. The company is acquiring pet pharmaceutical e-commerce company Allivet, and I’m excited about the opportunities here. Many investors don’t realize that a quarter of this business deals with companion animals – pets. Investing in a pet e-commerce company can help it attract more spending from loyal customers.

The gameplay will take some time. However, Tractor Supply is one of the most stable companies on the market, with a long history of growth and shareholder returns. In short, shareholders still have good reason to be patient as we wait to capitalize on growth opportunities like Allivet.