Tractor Supply Company · NASDAQ:TSCO
Tractor Supply — Investor Day (December 2024)
136 slides from Tractor Supply's investor day presentation, Dec 5, 2024
Slide 1: Tractor Supply Company Investment Community Day
Tractor Supply Company Investment Community Day December 5, 2024
Slide 2: Welcome
Welcome Mary Winn Pilkington SVP, Investor Relations and Public Relations 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y
Slide 3: Agenda
Agenda 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y Mary Winn Pilkington Welcome SVP, Investor Relations and Public Relations Hal Lawton Life Out Here 2030 President & CEO Kimberley Gardiner Neighbor’s Club: Enabling Future Growth SVP, Chief Marketing Officer Seth Estep Driving Sales Productivity EVP
Slide 4: Safe Harbor
Safe Harbor The Company claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The information in this presentation contains certain forward-looking statements. These statements discuss, among other things, expectati
Slide 5: Hal Lawton
Hal Lawton President & CEO 2024 INVESTMENT COMMUNITY DAY
Slide 6: Slide 6
Slide 7: Highly Experienced Management Team
Highly Experienced Management Team Hal Kurt Seth Melissa Rob John Colin Noni Kimberley Matthew Lawton Barton Estep Kersey Mills Ordus Yankee Ellison Gardiner Rubin President & Chief EVP, Chief EVP, Chief EVP, Chief Human EVP, Chief EVP, Chief EVP, Chief Supply SVP, General SVP, Chief SVP, Divisional
Slide 8: Today's Messages
Today’s Messages 1 We excel in a very attractive segment of retail with a differentiated business model 2 We are a purpose-driven company with a history of delivering strong results 3 We significantly strengthened our business over the last 5 years 4 We have built a strong foundation in our Life Out
Slide 9: Tractor Supply is the #1 Rural Lifestyle Retailer in the U.S.
Tractor Supply is the #1 Rural Lifestyle Retailer in the U.S. 2,270+ 50,000+ 37M+ Purpose-Built Strong Brand $1.2B+ Stores Team Members Members Supply Chain Recognition and Loyalty Digital Sales National Scale, Hometown Store
Slide 10: Mission and Values
TRACTOR SUPPLY C2 MISSION TRACTOR SUPPLY C2 VALUES * To work hard, have fun and make money by providing legendary service and great products at everyday low prices. * OUR CUSTOMER We are committed to being an integral part of our customers’ lives by being the most dependable Supplier of Out Here Lif
Slide 11: Our Values in Action
Our Values in Action Announcing a 5-1 Stock Split: Record Date on 12/16/24 Making Stock Ownership More Accessible for Team Members and Investors
Slide 12: Tractor Supply's Powerful Flywheel Fuels Our Momentum and Future Growth
Our Mission Tractor Supply’s Powerful Flywheel Fuels Our Momentum and Future Growth
Slide 13: Delivering Legendary Results for 20+ Years: Net Sales
Delivering Legendary Results for 20+ Years Net Sales $14.85 to $15.0B AGR .3% C +13 $850M 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F Long History of Navigating Various Economic Cycles While Delivering Strong Growth
Slide 14: Delivering Legendary Results for 20+ Years: Store Growth
Delivering Legendary Results for 20+ Years Store Growth ~2,300 nually res An w Sto 100 Ne 70 to 323 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F Long History of Navigating Various Economic Cycles While Delivering Strong Grow
Slide 15: Delivering Legendary Results for 20+ Years: Diluted EPS Growth
Delivering Legendary Results for 20+ Years Diluted EPS Growth $10.10 to $10.40 AGR % C 19.2 $0.18 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024F * Diluted EPS was adjusted retrospectively for stock splits. Long History of Navi
Slide 16: Our Strategy: Integral Part of Customers' Lives
Deliver Legendary Customer Experiences Advance Our ONETractor Capabilities We are committed to being an integral part of our customers’ lives as the dependable supplier of Operate the Tractor Way Out Here Lifestyle solutions. Anytime • Anywhere • Any way Go the Country Mile for Our Team Generate Hea
Slide 17: Slide 17
Slide 18: Achieved Robust New Store Growth with Strong Productivity and Returns
Achieved Robust New Store Growth with Strong Productivity and Returns Store Count ~2,300 1,844 2019 2024F
Slide 19: Slide 19
Slide 20: Scaled Project Fusion to Drive Sales Productivity
Scaled Project Fusion to Drive Sales Productivity Fusion Remodels 1,000+ Complete ~50% of the chain completed Not Initiated 2019 2019 2024F
Slide 21: Slide 21
Slide 22: Built Garden Centers to Gain Market Share and Improve Space Productivity
Built Garden Centers to Gain Market Share and Improve Space Productivity Garden Centers 550+ Not Initiated 2019 2019 2024F
Slide 23: Neighbor's Club
NEIGHBOR'S CLUB *
Slide 24: Transformed Neighbor's Club into a Powerful Growth Engine
Transformed Neighbor’s Club into a Powerful Growth Engine Neighbor’s Club Members 37M+ +22M 15M Members 2019 2019 2024F
Slide 25: Slide 25
Slide 26: Leveraged Technology to Drive Digital Sales Growth
Leveraged Technology and Improved Capabilities to Drive Digital Sales Growth Digital Sales $1.2B+ >340% Growth $270M 2019 2019 2019 2024F
Slide 27: Slide 27
Slide 28: Invested in Our Supply Chain to Provide Better Service and Margin Expansion
Invested in Our Supply Chain to Provide Better Service and Margin Expansion Facilities 29 3 +1 16 IMPORT 16 TRADE CENTERS MIXING CENTERS +10 10 +2 DISTRIBUTION 2019 CENTERS 2019 2019 2024F
Slide 29: Delivered on Our Strategic Commitments Over Last Five Years
Delivered on Our Strategic Commitments Over Last Five Years 2019 2024F Store Count 1,844 Stores ~2,300 Stores Project Fusion Not Initiated 1,000+ Complete Garden Center Not Initiated 550+ Complete Neighbor’s Club 15M Members 37M+ Members Digital Sales $270M >$1.2B Supply Chain 16 Facilities 29 Facil
Slide 30: Delivered Outstanding Financial Returns Over Last Five Years
Delivered Outstanding Financial Returns Over Last Five Years Drove Significant, Generated Substantial Invested in Our Increased Return of Balanced Sales Growth Earnings Growth Business to Drive Growth Capital to Shareholders Net Sales Operating Margin $3.0B ~$4.7B +80% +100 to 140 bps Reinvested Ret
Slide 31: Our Strategy: Integral Part of Customers' Lives
Deliver Legendary Customer Experiences Advance Our ONETractor Capabilities We are committed to being an integral part of our customers’ lives as the dependable supplier of Operate the Tractor Way Out Here Lifestyle solutions. Anytime • Anywhere • Any way Go the Country Mile for Our Team Generate Hea
Slide 32: Operating in a Large, Fragmented and Expanding Total Addressable Market
Operating in a Large, Fragmented and Expanding Total Addressable Market Total Addressable Market ~$225B ~$15B ~$195B ~$15B Direct Sales ~$180B Rx 2x Market Expansion Market Market Growth ~7% $12.7B ~$15B share 2021 2024F Updated TAM
Slide 33: Significant Runway for Growth
Existing Initiative Targets 2024F 2029T New Stores ~2,300 Stores 2,800 Stores Fusion Remodels 1,000+ Stores 100% of Chain Garden Centers 550+ Stores 1,000+ Stores Neighbor’s Club 37M+ Members 55M+ Members Digital $1.2B $2.4B Significant Runway for Growth
Slide 34: Significant Runway for Growth: New Initiatives
New Initiative Opportunities Localization Evolution of Fusion Remodel Direct Sales $1B to $1.5B Sales Opportunity Pet & Animal Rx $1B Sales Opportunity Final Mile Growth Enabler Retail Media $130M to $150M Profit Opportunity Exclusive Brands $50M Profit Opportunity Significant Runway for Growth
Slide 35: Significant Runway for Growth
Existing Initiative Targets New Initiative Opportunities 2024 2029T Part of Fusion Remodel Localization New Stores ~2,300 Stores 2,800 Stores $1B to $1.5B Direct Sales Sales Opportunity Fusion Remodels 1,000+ Stores 100% of Chain Pet & Animal Rx $1B Sales Opportunity Garden Centers 550+ Stores 1,000
Slide 36: Operating Environment for 2025
Operating Environment for 2025 Solid Economic Environment PCE Goods vs. Services Reversion Stabilization Macro Higher for Longer Rate Environment Assumptions Pet Food Category Recovery Tariffs and/or Other Policy Changes Ongoing Market Share Gains Average Ticket Growth Moderating Big Ticket New Life
Slide 37: Updated Long-Term Targets
Updated Long-Term Targets Net Sales Growth 6% to 8% Comp Sales Growth 3% to 5% Operating Margin 10% to 10.5% Diluted EPS Growth 8% to 11% New Store Opportunity 3,200
Slide 38: Neighbor's Club: Enabling Future Growth
Neighbor’s Club: Enabling Future Growth Kimberley Gardiner SVP, Chief Marketing Officer 2024 INVESTMENT COMMUNITY DAY
Slide 39: Focus for Today
Focus for Today Our large, diverse and growing customer 1 base is a strategic advantage We are a unique brand, growing our 2 national reach while enhancing our hometown feel 3 Neighbor’s Club continues to evolve and power new initiatives
Slide 40: Customer Segments Key to Strategic Growth
Customer Segments Key to Strategic Growth Country Pet Backyard Hobby Big Barn Dabbler Enthusiast Homesteader Farmer Owner Transactions 3 7 10 10 52+ Highest-Value 10x Spend C.U.E. Shoppers 3x Spend Mission-Oriented Customers
Slide 41: Migration into Our Markets Remains a Structural Advantage
Migration into Our Markets Remains a Structural Advantage Cumulative Migration +400K Rural 2019 2020 2021 2022 2023 2024 YTD Urban -3M Source: Cleaveland Fed: Net migration into small metro and rural areas and net migration to/from urban neighborhoods, cumulative (four-quarter moving average, 2019-Q
Slide 42: National Scale with a Hometown Feel
National Scale with a Hometown Feel Local Rodeo, Iowa FFA Store Visit, Indiana Pet Adoption, Texas 4-H Fundraiser, Tennessee County Fair, Florida
Slide 43: Nurturing the Core, Growing the Base
Nurturing the Core, Growing the Base
Slide 44: Neighbor's Club is One of the Largest and Fastest-Growing Loyalty Programs in Retail
Neighbor’s Club is One of the Largest and Fastest-Growing Loyalty Programs in Retail 2024 2021 37M+ ~80% 2019 20M of sales ~60% 15M of sales ü Personal Offers ü Points Multipliers <30% ü Free Shipping of sales ü Same-Day Delivery ü Earn Points ü Free Trailer Rental ü Tiers ü TSC Card Benefits ü Rewa
Slide 45: More Migration More
More More Migration Loyalty Better More Recognition Greater Rewarding Frequency Bigger Baskets Greater Retention More Improved Spend Honoring Relevance Our Heroes
Slide 46: ‘@ ona
‘@ ona * SWANK vous & S a tenes, aN 33 evenvowe wourin net? Sunt wont AND COMMUNITIES GOING.
Slide 47: Members Spend 50% More after Joining the Club
Members Spend 50% More after Joining the Club Customer Prior +1 Year +2 Years Journey Spend Transactions 5 6 7 9 Categories Shopped
Slide 48: Customer Data Informs Strategies to Power Growth
Customer Data Informs Strategies to Power Growth Locations Supply Assortment Offers Experience Leverage Data & Insights Grow Program Value Frequency Transaction Retention Size 1 3
Slide 49: Data Science & Machine Learning Models Deliver Personalization at Scale
Data Science & Machine Learning Models Deliver Personalization at Scale More Sales per Greater Transactions Customer Retention Triggered Offers Recommendation Engines Omnichannel Orchestration Repeat Purchase Incentives Cross-Selling Models Send Time Optimization AI Content Creation (Beta) New Categ
Slide 50: Personalization at Scale: More Transactions
Data Science & Machine Learning Models Deliver Personalization at Scale More Transactions Triggered Offers Repeat Purchase Incentives AI Content Creation (Beta)
Slide 51: Personalization at Scale: Sales per Customer
Data Science & Machine Learning Models Deliver Personalization at Scale Sales per Customer Recommendation Engines Cross-Selling Models New Category Journeys
Slide 52: Personalization at Scale: Greater Retention
Data Science & Machine Learning Models Deliver Personalization at Scale Greater Retention Omnichannel Orchestration Send Time Optimization Churn Models
Slide 53: Personalization at Scale: Results
Data Science & Machine Learning Models Deliver Personalization at Scale More Sales per Greater Transactions Customer Retention Triggered Offers Recommendation Engines Omnichannel Orchestration Repeat Purchase Incentives Cross-Selling Models Send Time Optimization AI Content Creation (Beta) New Categ
Slide 54: Neighbor's Club is the Fuel for this Tractor's Engine
Neighbor’s Club is the Fuel for this Tractor’s Engine Organic Store Growth Digital Localization Direct Sales Pet & Animal Rx Final Mile Delivery Retail Media Exclusive Brands
Slide 55: Today's Headlines
Today’s Headlines 1 We have a unique ability to attract and retain 55M+ Neighbor’s Club 2 We provide customers with national scale customers due to our Members by 2030 benefits and structural advantages a hometown feel 3 37M+ 4 Neighbor’s Club Members Neighbor’s Club is just getting started; Today e
Slide 56: Driving Sales Productivity
Driving Sales Productivity Seth Estep EVP, Chief Merchandising Officer 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y
Slide 57: Focus for Today
Focus for Today Tractor Supply is relentless about 1 offering great products at everyday low prices for Life Out Here We have a robust exclusive 2 brand lineup with opportunity to evolve and accelerate Localization provides a significant 3 runway for ongoing growth
Slide 58: Our Merchandising Strategy is Rooted in Our Mission
Our Merchandising Strategy is Rooted in Our Mission Localization C.U.E. Our Mission Consumable, Usable, Edible To work hard, have fun and make money by providing legendary service and great products at everyday low prices. Value OUR CUSTOMER Innovation We are committed to being an integral part of o
Slide 59: Life Out Here Assortment is the Foundation of Our Merchandising Strength
Life Out Here Assortment is the Foundation of Our Merchandising Strength Leading Unique Products for Private Label and National Brands Life Out Here Exclusive Partnerships Our Offering is Unparalleled within Farm and Ranch
Slide 60: Partnering with National Brands Our Customers Love
Partnering with National Brands Our Customers Love
Slide 61: Driving Differentiation Tailored to Life Out Here
Driving Differentiation Tailored to Life Out Here
Slide 62: Driving Differentiation Tailored to Life Out Here
Driving Differentiation Tailored to Life Out Here
Slide 63: Compelling Portfolio of Private Brands and Exclusive Partnerships
Compelling Portfolio of Private Brands and Exclusive Partnerships Private Label Exclusive Partnerships
Slide 64: Doubling Down on Private Label and Exclusive Brands
Doubling Down on Private Label and Exclusive Brands Private Label Advantages Drive Customer Loyalty 65% higher customer retention Increase Sales >4x higher average annual spend Expand Margins 500+ bps higher margin rate Growing Private Label Penetration from ~29% to ~33% Represents a $50M+ Margin Op
Slide 65: Building a World-Class Global Sourcing Capability
Building a World-Class Global Sourcing Capability Supply Points Direct imports represent <15% of total sales Diversified supplier base Dedicated global sourcing team Best-in-class logistics and transportation network
Slide 66: Prioritizing Sales-Driving Investments
Prioritizing Sales-Driving Investments 100% ~175-200 remodels of chain in Fusion + 90-100 new stores per year 2029T 1,000+ 1,000+ Garden stores in Fusion Centers ~60% of 2024F new stores each year & Launched opportunistic remodels Life Out Here 550+ strategy Garden Centers complete 2020 Fusion and G
Slide 67: Merchandising Strategy and Investments are Driving Results
Merchandising Strategy and Investments are Driving Results Sales per Square Foot Productivity Driven by ~$382 Core Merchandising $271 40%+ improvement In-Flight Life Out Here Initiatives 2019 2024F
Slide 68: Localization: The Next Evolution of Project Fusion
Localization: The Next Evolution of Project Fusion Localization Right Product Right Place Right Space Localization Will Drive Incremental Productivity in Future Fusion Stores 1 3
Slide 69: Data-Driven Archetypes: Foundation for Localization
Data-Driven Archetypes: Foundation for Localization Overview of all archetypes Equine Essentials Livestock Life Land & Leisure Enabled by AI/ML Algorithm Evaluating Several Data Sources INCOME OCCUPATION INDUSTRY CLIMATE LAND ACRES COMPETITION AG FEATURES MOSAIC GROUPS
Slide 70: Strategic Investments Will Further Increase Productivity
Strategic Investments Will Further Increase Productivity Sales per Square Foot ~$460 $382 20%+ improvement 2024F 2029T
Slide 71: Today's Headlines
Today’s Headlines Our merchandising strategy is rooted in our Mission 1 to offer great products at everyday low prices We are adding capabilities to further leverage our private label 2 and exclusive partnerships to drive sales and expand margins Localization will complement in-flight Life Out Here
Slide 72: Leading with Legendary Customer Service
Leading with Legendary Customer Service John Ordus EVP, Chief Stores Officer 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y
Slide 73: Focus for Today
Focus for Today Our team members and our culture 1 provide a competitive advantage 2 We continue to invest in a best-in-class customer experience Direct Sales is a significant 3 opportunity for sales growth where we have a right to win
Slide 74: We are Built to Be Legendary
We are Built to Be Legendary 2024 Recognition Strong foundation in TSC RANK Mission & Values TSC RANK 130 th Overall 5th Specialty 5-Star Investing in the right team members Focus on increasing quality and frequency of customer interactions 42 Consecutive Months of Customer Service Satisfaction Scor
Slide 75: GURA: The Center of Our Customer Service Approach
We are Built to Be Legendary GURA: The center of our customer service approach Pro- Activity A+ Coaching Greet Sales Leadership Uncover Product Recommend Knowledge Ask & Appreciate
Slide 76: AI-Driven Tasking
We are Built to Be Legendary AI-Driven Tasking
Slide 77: Learning On The Go
We are Built to Be Legendary Honeywell TRACTOR SUPPLY Co Learning On The Go STORES WE Leaming on
Slide 78: Slide 78
Slide 79: Tractor Vision
TRACTOR SUPPLY Co Tractor Vision ‘TRAFFIC DWELL
Slide 80: Team Member Technology Scorecard
TRACTOR SUPPLY C2’ Honeywell ~ 1522 negens @ Teresa Degenstein District Manager G Tsco $280.25 LED Wek ont Year 8 une 17 © pisTmicT essa ate Pin uma $148,831 = EpDistriet 0599 ‘Scorecard My Team Leaderboard < ° .
Slide 81: Big Barn Owner
Big Barn Owner Large landowners Own multiple animal types Shop 30+ departments Compared to average customer: ~2x items per trip ~10x transactions per year 1 1
Slide 82: Direct Sales: Our Right to Win
Capturing Our Fair Share Our Right to Win $15B Direct Sales Partner with venues, arenas, equine centers and large event spaces Total Addressable Market Established partnerships with racetracks and arenas Gain Incremental B2B Customers $1-$1.5B One-in-four Farm and Ranch professionals already shops a
Slide 83: Capabilities to Enable Direct Sales Model
Capabilities to Enable Direct Sales Model Today Near-Term Future Final Mile Commercial Direct B2B Digital Invoicing Instant Quote Delivery Credit Card Salesforce Selling Platform Generation Bulk Quote Subscription Field Lead Enhanced RFP Bids Form Services Transactions Generation Loyalty Program Ben
Slide 84: Strategic Roadmap to Accelerate Growth
Strategic Roadmap to Accelerate Growth Direct Sales is a 2028 - 2029 phased investment for future growth 2026 - 2027 Expand salesforce to all TSC 2025 Expand bulk delivery regions across the country capabilities and customer Refine offerings to capture Launch Direct Sales through offerings new custo
Slide 85: Today's Headlines
Today’s Headlines 1 Our team members and our culture provide a competitive advantage Investments in technology are driving sales and improving 2 team member engagement, productivity and the customer experience Direct Sales represents a significant opportunity 3 where we have the right to win 15
Slide 86: Leveraging Growth Through Digital and AI Transformation
Leveraging Growth Through Digital and AI Transformation Rob Mills EVP, Chief Technology, Digital and Corporate Strategy Officer 2024 INVESTMENT COMMUNITY DAY
Slide 87: Focus for Today
Focus for Today 1 We are expanding our world-class technology organization in Digital and AI transformation 2 Our Digital business is a competitive advantage and a platform for rapid growth We are entering a $15B total addressable 3 market for Pet and Animal Rx 4 The launch of TSC Retail Media Netwo
Slide 88: TSC & Me, Tractor Vision, AI Digital Platform
TSC & Me Tractor Vision AI Digital Platform HEY! GURA BOPIS
Slide 89: We are the Digital Leader in the Farm and Ranch Sector
We are the Digital Leader in the Farm and Ranch Sector Delivering World-Class Technology TOP 10 Best Online Shops Newsweek 200% Growth in Transactions since 2019 $1.2B+ 130% Increase in Digital Sales Products Available 10M+ Online since 2019 Mobile App Downloads by Customers to Date 2,215% Growth in
Slide 90: Our Digital Platform Provides a Competitive Advantage for Accelerating Growth
Our Digital Platform Provides a Competitive Advantage for Accelerating Growth Digital Sales Intuitive shopping experience ~$2.4B Optimized assortment $1.2B Increased traffic and conversion 2024F 2029T Legendary Service Enabled Through Digital Capabilities 5
Slide 91: AI Discoverability, Personalized Impulse Buy, Team Member Expertise
AI Personalized Team Member Discoverability Impulse Buy Expertise
Slide 92: Intuitive Shopping Experience
Intuitive Shopping Experience Discover Impulse Convenience Drives Increased Basket Size, Convenience and Margin Improvement
Slide 93: Fishing Shop: Assortment & Experience Experts
Fishing Shop: Assortment & Experience Experts Experts bringing the right product, services and content for unique experiences
Slide 94: Optimized Assortment for Life Out Here
Optimized Assortment for Life Out Here Full Selection of Key Vendors Tractorized Products Lifestyle Specific Delivering the Products Our Customers Need to Do More of What They Love
Slide 95: Improve Traffic Effectiveness and Increase Conversion
Improve Traffic Effectiveness and Increase Conversion “Out Here” Design Performance Optimization Streamlined Path to Purchase n Stock up on your winter weather o preparation necessities w Targeted Campaigns Landing Page Effectiveness Engagement-Boosting Features Optimized Experience, Engagement and
Slide 96: Welcoming Allivet to Tractor Supply
Welcoming Allivet to Tractor Supply Established Industry-Leading Industry Expertise D2C Offering, Allivet.com Auto-Ship Capabilities of Management Team High Barriers to Entry Highly-Defensible Comprehensive Rx Loyal Lifetime Market Position and Customer Switching Solutions Subscription Customers Cos
Slide 97: Expanding Services with Pet and Animal Rx
Expanding Services with Pet and Animal Rx $15B Total Addressable Market Shared values Accretive margins $1B+ Opportunity Scalable infrastructure Private label and operating margin expansion
Slide 98: Tractor Supply Rx
Tractor Supply Rx Partner with your vet to fulfill your pharmacy needs now
Slide 99: Uniquely Positioned to Win as the Value-Based Rx Solution
Uniquely Positioned to Win with Our Life Out Here Customers as the Value-Based Rx Solution Customer Offerings Licensed pharmacists in all 50 states Autoship capabilities Neighbor’s Club rewards for Rx Rx accessible both online and in store $1B+ Vets Out Here network Future compounding offering in Rx
Slide 100: Tractor Supply Retail Media Network
Tractor Supply Retail Media Network
Slide 101: Scaling TSC Retail Media Network to Drive Sales and Enhance Margin
Scaling TSC Retail Media Network to Drive Sales and Enhance Margin Our opportunities Growth of incremental sales Enhancement of margin Increased partnership with vendors Enriched content $130M to $150M+ Profit Opportunity Supports Our Path to $2.4B+ and Activates a New Profit Stream 16
Slide 102: Today's Headlines
Today’s Headlines 1 We will continue to leverage technology to support growth and productivity 2 We have a significant opportunity to double our Digital business 3 Tractor Supply Rx represents a new line of business to drive $1B in sales 4 TSC Retail Media Network targets $130M-$150M in profit oppor
Slide 103: Purpose-Built for Life Out Here
Purpose-Built for Life Out Here Colin Yankee EVP, Chief Supply Chain Officer 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y
Slide 104: Focus for Today
Focus for Today Our supply chain is purpose-built 1 for Life Out Here 2 Investments have delivered material returns Final Mile is the next unlock 3 for our supply chain Final Mile will be the foundation 4 for other strategic investments
Slide 105: Slide 105
Slide 106: We Are a Purpose-Built Supply Chain for Life Out Here
We Are a Purpose-Built Supply Chain for Life Out Here Designed for Life Out Here Leveraging data and Unlocking all assets to maximize products and locations technology to drive efficiency flexibility Investments Allow Us to Fulfill Our Mission as a Dependable Supplier
Slide 107: Advantaged Network
Advantaged Network MC DC DC MC Future Location DC MC DC DC MC DC Network enabled MC MC us to move MC DC MC ITC MC ITC DC MC DC DC MC DC MC 8.6B lbs. of C.U.E. product MC ITC MC MC MC DC Distribution Center MC Mixing Center ITC Import Trade Center
Slide 108: Our Investments Delivered Material Results
Our Investments Delivered Material Results Supported Growth Scaled Network Increased Productivity Disciplined Inventory +2 +46% Distribution Centers 20% reduction Highest +10 Truckload volume In Miles per Load In-Stocks +344% Mixing Centers +12% In last six years Digital volume +1 DC Efficiency Impo
Slide 109: Final Mile is the Next Unlock for Our Supply Chain
Final Mile is the Next Unlock for Our Supply Chain 90% >5 Million of our Digital deliveries made in 2024 orders occur within 40 miles of stores 25% 48 lbs Average of deliveries are oversized product delivery weight 10x fewer returns on TSC delivery than other options 50% of Direct Sales will use TSC
Slide 110: Leverage Stores as Integrated Delivery Nodes
Long-Term Opportunity: Leverage Stores as Integrated Delivery Nodes Suppliers Distribution Center Store (TSC DCs that also serve as fulfillment centers) (2,300 stores) Customer Vendor Carriers Vendor to Home DC to Home MCs Store to Home: Same Day Suppliers DCs DC/Vendor to Store Stores Store to Home
Slide 111: Delivering a Solution for Every Customer
Delivering a Solution for Every Customer Hub Store Spoke Store Mixing Center Distribution Center
Slide 112: Timeline for Scaling Final Mile
Timeline for Scaling Final Mile 2028 - 2029 2026 - 2027 2025 Drive volume to TSC delivery Activate greater inventory Adapt operating model Increase route density to accessibility for the customer drive down fulfillment cost Complement services provided Implement order orchestration technology by thi
Slide 113: Final Mile Delivery is the Foundation for Other Strategic Initiatives
Our Final Mile Delivery Solution is the Foundation for Other Strategic Initiatives Bring Legendary Service Equip Direct Sales Drive Digital Fulfillment to Our Customer’s Property Empowering Us to Deliver More 11
Slide 114: Today's Headlines
Today’s Headlines 1 We are maximizing our dependable, scalable and efficient supply chain as a competitive advantage for us 2 Future growth with be supported through our enhanced, flexible network 3 We are deploying our purpose-built Final Mile solutions for Life Out Here
Slide 115: Delivering Strong and Durable Total Shareholder Return
Delivering Strong and Durable Total Shareholder Return Kurt Barton EVP, Chief Financial Officer 2 02 4 I NV ES TM ENT C O M MU NI T Y D A Y
Slide 116: Focus for Today
Focus for Today We have a storied history with a strong 1 foundation and distinct advantages Our Life Out Here 2030 strategy provides 2 compelling drivers for long-term growth and margin expansion We remain committed to disciplined and 3 balanced capital allocation We are focused on delivering stron
Slide 117: Tractor Supply's Strong History of Growth
Tractor Supply’s Strong History of Growth Compound Annual Growth Rates Store Count Sales Diluted EPS TSR 5 Year 4.3% 12.3% 17.1% 27% 10 Year 6.1% 10.1% 14.4% 16% 20 Year 8.2% 11.3% 17.8% 21% Calculations assume mid-point of 2024 financial guidance range TSR calculated as of November 2 9, 2024 Consis
Slide 118: Structural Drivers of Sales Growth
Structural Drivers of Sales Growth 3-Year Comp Stack 2-Year Comp Stack 2020 to 2022 2023 to 2024F +46% Flat to +1% C.U.E. Discretionary Commodity Deflation Structurally Commodity Inflation higher base Structural for growth Inflation Basket Mix 2024F 2019 Transactions Ticket Growth included numerous
Slide 119: Building on a Strong Foundation for Growth
Building on a Strong Foundation for Growth Continued Growth Opportunities Improved Strength Enduring Market Trends New Fusion Garden Neighbor’s Digital Best-in-Class Purpose-Built Stores Remodels Centers Club Loyalty Program Supply Chain $225B TAM Leader in a +25% growth Fragmented Market Localizati
Slide 120: Updated Long-Term Targets
Updated Long-Term Targets Net Sales Growth +6% to +8% Financial Comp Sales Growth +3% to +5% Targets Operating Margin Rate 10% to 10.5% Diluted EPS Growth +8% to +11% Dividend Payout Ratio ~40% Capital Share Count Reduction 1% to 2% Allocation Net Capital Expenditures ~4% of Net Sales Targets Levera
Slide 121: Drivers of Long-Term Sales Growth
Drivers of Long-Term Sales Growth ~2.5% 6% to 8% Comp Sales Growth of 3% to 5% 2% to 3% New New Stores Initiatives Existing 1% to 2% Initiatives Category Growth Net Sales and Macro Factors Growth Numerous Growth Vectors to Deliver Strong Financial Performance
Slide 122: Compelling New Store Opportunities
Compelling New Store Opportunities Runway for Growth Strong New Store Productivity Expanding New Store Target to 3,200 from New Store Consistent Cash Flow Payback Average Productivity Performance Positive in Period of First Year 3,000 60% to 70% with Year 1 2 to 4 Years Sales Increasing 30% Higher A
Slide 123: Existing Initiative Update
Existing Initiative Update 2019 2024F 2029T New Stores 1,844 Stores ~2,300 Stores 2,800 Stores Fusion Remodels Not Initiated 1,000+ Stores 100% of Chain Garden Centers Not Initiated 550+ Stores 1,000+ Stores Neighbor’s Club 15M Members 37M+ Members 55M+ Members Digital $270M $1.2B $2.4B Significant
Slide 124: New Initiatives
New Initiatives Localization Improves Performance in Fusion Remodels & New Stores Sales Direct Sales $1B to $1.5B Sales Opportunity Opportunity Pet & Animal Rx $1B Sales Opportunity Final Mile Growth Enabler Supporting ~50% of Direct Sales Margin Retail Media $130M to $150M Profit Opportunity Enable
Slide 125: Commitment to Growing Operating Margins
Commitment to Growing Operating Margins Drivers of Long-Term Operating Margin Target 10% to 10.5% 9.8% to 10.1% Moderating Exclusive Moderation of macro Retail brands depreciation pressure Leveraging Structural media deleverage size improvements and scale in supply chain Transportation Product & mar
Slide 126: Disciplined and Balanced Capital Allocation
Disciplined and Balanced Capital Allocation Our Priorities Our Targeted Approach Net capital expenditures at 4% of net 1 Organic Growth Investments sales 2 Healthy and Growing Dividend Dividend payout of 40% 3 Consistent Share Repurchases Float reduction of 1% to 2% annually Pursue when core to the
Slide 127: Opportunity to Deliver Double-Digit Total Shareholder Return
Opportunity to Deliver Double-Digit Total Shareholder Return Long-Term Annualized TSR Targets EPS growth 8% to 11% ~1.5% 9% to 12% 1% to 2% Potential upside Dividends from strategic 0.5% to 1% initiatives and 6% to 8% Share tuck-in Margin repurchases acquisitions expansion Net Sales Annualized Growt
Slide 128: 2025 as a Transition Year
2025 as a Transition Year Anticipate low-single digit comp sales growth With growth accelerating in the second half as conditions improve Planning operating margin centered around 2024 Ongoing gross margin expansion opportunity Includes self-funding of 15 bps for our new strategic initiatives Capita
Slide 129: Today's Messages
Today’s Messages Life Out Here 2030 strategy and enduring market 1 trends provide a long runway for sales growth Our strategic plan has at its core a commitment to 2 expanding operating margins Disciplined capital allocation and a healthy balance 3 sheet support our strong and durable growth Compoun
Slide 130: Hal Lawton
Hal Lawton President & CEO 2024 INVESTMENT COMMUNITY DAY
Slide 131: What You Heard Today
What You Heard Today Kimberley Gardiner • We have an engaging and growing customer base SVP, Chief Marketing Officer • Neighbor’s Club is an enabler to new growth initiatives and will continue to evolve Seth Estep • Our private label and exclusive brand penetration goal provides $50M profit opportun
Slide 132: What You Heard Today
What You Heard Today Rob Mills • AI and Machine Learning support future growth and productivity EVP, Chief Technology, • Our Digital business is a platform for rapid growth with opportunity to double sales Digital & Corporate Strategy Officer • Pet and Animal Rx represents a new growth area, targeti
Slide 133: Today's Messages
Today’s Messages 1 We excel in a very attractive segment of retail with a differentiated business model 2 We are a purpose-driven company with a history of delivering strong results 3 We significantly strengthened our business over the last 5 years 4 We have built a strong foundation in our Life Out
Slide 134: Updated Long-Term Targets
Updated Long-Term Targets Net Sales Growth 6% to 8% Comp Sales Growth 3% to 5% Operating Margin 10% to 10.5% Diluted EPS Growth 8% to 11% New Store Opportunity 3,200
Slide 135: Q&A
•Hal would like an introduction to Q&A slide here
Slide 136: Investment Community Day
I NVESTMENT COMMUNI TY DAY
Tractor Supply Company — Investor Day (December 2024) on 6ix