Tailwinds in Pet Business: A Catalyst for TSCO's Growth Phase?

Tractor Supply Company’s TSCO pet business remains a core strength and profound competitive advantage. The company specializes in pet food, supplies and services, seeking to grab a larger share of the pet industry. The pet industry has evolved significantly post-pandemic, as pets brought solace to U.S. households in the tough pandemic times. 

As the pet industry gains momentum, demand for high-quality products and services is rising.  As such, TSCO has been making every possible effort to become a one-stop shop for pet owners. The company is aggressively strengthening its foothold in pet dominance by offering comprehensive pet care solutions. Pet owners can easily access TSCO’s pet products, prescription medications and in-store services, including grooming and veterinary care. 

Regarding pet care, Tractor Supply has adopted a multi-channel approach, further buoyed by its Neighbor’s Club loyalty program. Petsense, which is a fully-owned subsidiary of TSCO and a pet specialty retailer, caters well to the needs of pet owners. The company is committed to introducing Petsense by Tractor Supply stores to efficiently meet pet requirements. As of March 29, 2025, it operated 206 Petsense by Tractor Supply stores in 23 states.

The advent of online purchasing has further bolstered the pet industry. Allivet, a privately held online pet pharmacy, complements Tractor Supply's existing ‘Life Out Here’ range of products and services. TSCO’s Allivet buyout marked a significant strategic move for it in enriching its footprint in the growing pet wellness and animal health sector. Allivet’s platform simplifies pet care by ensuring easy access to trusted brand-name medications, expert pharmaceutical guidance and hassle-free automatic deliveries through its auto-ship program.

In a nutshell, TSCO seeks to be a dominant player in the pet market by leveraging Petsense stores, the Allivet integration and the Tractor Supply Rx medications. This is likely to boost its overall revenues and aid growth.

TSCO’s Competition in the Flourishing Pet Market

Colgate-Palmolive Company CL, Chewy, Inc. CHWY and Central Garden & Pet Company CENT are the key companies competing with Tractor Supply in the pet space.

Colgate is TSCO’s key competitor in the pet care market. Hill's Pet Nutrition - CL’s pet care business offers science-led pet nutrition solutions, focusing on premium, veterinarian-led pet food. CL also plans to expand into the fresh pet food market. In first-quarter 2025, Colgate’s Hill's Pet Nutrition segment delivered sales of $1.1 billion, contributing about 22.8% to the overall quarterly sales. Through the Hill’s Pet Nutrition division, Colgate has been a leader in specialty pet nutrition product offerings for dogs and cats, with its products marketed in more than 80 countries and territories across the world. Hill’s Science Diet covers various products for everyday nutritional needs, while Hill’s Prescription Diet is a range of therapeutic pet foods to aid nutritionally and support pets in stages of health.

Chewy, which operates as an e-commerce retailer for pet food and other related products, has been enhancing its presence in the pet market. CHWY has been making technology upgrades for its website and online platforms to aid online sales and be the perfect destination for pet lovers. Robust active customer growth and engagement, along with high Autoship customer loyalty, have been steadily contributing to its results. CHWY’s healthcare business, which offers products and services, spanning online pharmacy, telehealth pet insurance and veterinary-led management tools, is encouraging. 

Central Garden & Pet has been a market leader in the pet and garden spaces, delivering innovative and trusted solutions.  CENT’s Pet segment consists of dog and cat supplies like treats and chews, toys, beds and containment, grooming products, waste management and training pads; supplies for aquatics, small animals, reptiles and pet birds such as toys, enclosures and habitats, bedding, food and supplements; products for equine and livestock, animal and household health and insect control products; live fish and small animals, and outdoor cushions. Central Garden & Pet has been advancing its growth strategy through innovation, e-commerce expansion and cost efficiencies across its Pet and Garden segments.

TSCO’s Price Performance, Valuation and Estimates

Shares of Tractor Supply have lost 2.8% year to date compared with the industry’s decline of 7.5%.

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From a valuation standpoint, TSCO trades at a forward price-to-earnings ratio of 23.09X compared with the industry’s average of 16.38X.

The Zacks Consensus Estimate for TSCO’s 2025 and 2026 EPS indicates year-over-year growth of 2.5% and 11%, respectively. The company’s EPS estimate for 2025 and 2026 has been intact in the past 30 days.
 

TSCO stock currently carries a Zacks Rank #4 (Sell). 

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

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This article originally published on Zacks Investment Research (zacks.com).

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