Millennials are leading a rural revitalization

Many millennials are leaving dense urban centers to settle in more rural communities, and the relocation trend has been a boon for Tractor Supply, CEO Hal Lawton told CNBC Monday.

“We’ve been gaining market share with our core customer, but also with the new customer: the millennial customer,” Lawton said in a one-on-one with Jim Cramer on “Mad Money.” “We’re really seeing a revitalization of rural led by millennials.”

After years of facing barriers to entering the housing market, the millennial generation, ranging roughly between ages 25 and 40, has emerged as a large share of first-time homebuyers in recent years. It’s led to higher demand for products for pets, poultry, gardening and self-reliance, Lawton said.

“We saw a 4 point sales penetration change last quarter with the millennial cohort,” he said.

Tractor Supply, which operates nearly 2,000 stores and has 42,000 employees, posted results from the first quarter Thursday that were much stronger than expected. The farm equipment supplier, which is valued at $22 billion, saw same-store sales surge 39%, helping produce $2.79 billion in revenue and earnings of $1.55 per share. Sales were up 53% from pre-pandemic levels.

“There absolutely are structural trends that are driving our business that we think have a longstanding trend to them,” Lawton said.

The stock closed at $190.95 Monday, up 6% since the company reported. Tractor Supply also raised its full-year outlook.

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