Tractor Supply Company recently dropped its diversity and environmental programs. The move came after social media criticism from conservatives.
A survey suggests 78% of aware customers view this positively. ESG investing has grown to $30 trillion in assets globally.
Mizuho Survey Reveals Customer Sentiments
Mizuho surveyed 251 frequent Tractor Supply customers. 78% viewed the ESG abandonment positively, while 10% were negative.
The survey pool came from over 900 contacted customers. Consumer surveys influence about 95% of business decisions.
Political Landscape Shifts in Business
Recent events show a rightward shift in business culture. Republican convention speakers attacked “woke” culture.
High-profile executives like Elon Musk support Donald Trump. About 42% of S&P 500 CEOs lean Republican.
Stock Performance Amid Cultural Debate
Tractor Supply’s stock recovered after initial stumble. It’s up 33% year-to-date, outperforming S&P 500’s 20% gain.
The stock trades at 27 times forecasted earnings. The average P/E ratio for the S&P 500 is around 22.
Company’s Previous Stance on Diversity
Tractor Supply previously advocated for diversity in business. It set science-based carbon emissions goals.
The company operated 2,016 stores as of 2022. About 90% of S&P 500 companies publish sustainability reports.
Social Media Boycott Campaign Emerges
Conservatives launched a #BoycottTractorSupply campaign on June 6. Similar campaigns targeted Target and AB InBev.
Social media boycotts can reduce stock prices by 1.3% on average. About 76% of consumers expect brands to contribute to society.
Tractor Supply’s Rapid Policy Reversal
The company eliminated its DEI program on June 27. It dropped carbon emissions goals for conservation efforts.
This reversal occurred within three weeks of criticism. Corporate policy changes typically take 12-18 months to implement.
Survey Results Defy Political Stereotypes
47% of positive respondents identified as Democrats. 38% identified as Republicans.
66% said they would shop more after the change. Political affiliation influences consumer behavior for 57% of Americans.
Analyst Predicts Fading Cultural Impact
Mizuho analyst believes cultural shift’s importance will fade. Sales growth becomes the primary concern for Tractor Supply.
The company’s comparable-sales growth is flattening. Retail analysts predict 3.5% industry growth in 2023.
Stock Valuation and Analyst Opinions
Mizuho rates Tractor Supply stock as Hold. The analyst’s price target is 13% below current level.
FactSet-tracked analysts are split between Buy and Hold. About 60% of retail stocks receive Buy ratings from analysts.
