1 in 5 Tractor Supply customers now raise chickens, thanks to egg inflation
The high price of eggs is spurring many Americans to invest in a new backyard pet — chickens. That poultry, in turn, is an important catalyst for retailer Tractor Supply (TSCO), which sells everything from coops to feed to the chicks themselves.
Around 11 million Americans now own chickens, according to the American Pet Products Association, a 28% jump from 2023. That's good news for Tractor Supply, whose just over 2,300 locations cater to hobbyist farmers and serve for many as a sort of general store.
'Nearly 1 in 5 of our customers raise chickens now,' Tractor Supply CEO Hal Lawton told Yahoo Finance in a recent interview. 'I think part of it is just the overall wave that's occurring in that category and in that animal species. And then some of it was also driven by the concern of egg prices. But even as egg prices have come down, we've not seen any slowdown in that category in the business.'
Prices have fallen from a high of $6.23 on average for a dozen large Grade A eggs in March of this year, but they were still $4.55 a dozen in May, up from $2.70 in May 2024.
Still, Tractor Supply expects to sell a record number of chickens during its 'Chick Days,' a spring event at which it sells live baby birds. In 2024, the chain sold 10.5 million chicks as part of the promotion.
While the category is still a small proportion of revenue, according to Mizuho analyst David Bellinger, it's a traffic driver.
'We estimate about 20% of Neighbors Club loyalty members (approx. 7-8M) own chicks, and spend $300+ per year across ~10x transactions - on par with the "backyard homesteader" customer set per TSCO's analyst day,' Bellinger wrote in a March note.
Tractor Supply's stock has been in a late post-pandemic normalization phase. When urbanites fled cities and leaned into remote work, some also embraced the rural lifestyle and became Tractor Supply customers. From its low in March 2020, the stock continued to rise through October 2024, ultimately climbing about 350%.
Since then, shares have slid by about 15%. That slowdown has mirrored same-store sales, which spiked by 23% and 17% in 2020 and 2021, respectively, before slowing in 2022 and flatlining in 2023 and 2024.
'If I look back over the last five years, we've basically doubled the size of our business,' Lawton said in the interview. 'I think different than a lot of retailers, we've not given back any of those gains that we've had over the last five years.'
One pressure point over the past 18 to 24 months, Lawton said, has been pricing for animal feed, a big business for Tractor Supply for owners of everything from chickens to cows to dogs and cats. It's tied to commodity prices, which have been trending lower. Lawton is optimistic they're starting to move higher.
As for shoppers, Lawton said demand has remained consistent: 'I think the consumer continues to be stable and strong.'
Investors will have to wait until the company's next earnings report, scheduled for late July, to determine just how strong demand has been — and just how many chicks Tractor Supply sold this quarter.
Julie Hyman is the co-host of Market Domination on Yahoo Finance. You can find her on social media @juleshyman.
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