Stocks for non-essential retailers have cratered since the beginning of the year. But Tractor Supply Co.'s (NASDAQ:TSCO) stock is up over 10% as its stores remain open to provide essential supplies for rural ranches and farms.

This isn't the first downturn this 82-year-old retailer has seen, and it's pulling out its tough-times playbook and making all the right moves.

Let's dive into the company's most recent quarterly results, discuss how management is taking care of its stakeholders, and look at what it's doing during this pandemic to make sure it comes out stronger on the other side.

TSCO Chart

Stock prices year-to-date through April 28, 2020. TSCO data by YCharts.

A solid start to 2020

Coming off tepid earnings results to end 2019, the first quarter's results were a pleasant surprise for investors and a great debut for the company's new CEO, Hal Lawton, who started in mid-January. Top-line revenue grew 7.5% year over year to $1.96 billion on a solid same-store sales comp growth of 4.3%. Gross margins were flat, but net income increased 9%, and diluted earnings per share grew a healthy 12.7%. A net of 19 stores were added in the quarter.

Improved selling, general, and administrative costs offset $7 million in incremental costs due to the COVID-19 pandemic that the company used to help employees during this difficult time.

Taking care of stakeholders

Management moved fast to respond to the coronavirus. Starting in February, a cross-functional team was assembled that met twice per day, seven days a week to guide the company's actions.

Lawton stated that this team was "empowered to move fast and make decisions. They have served as the central nervous system for the bulk of our response." This team and top management put numerous measures in place to help protect employees, customers, and shareholders. 

A farmhouse in a rural setting

A segment of Tractor Supply Company's customers are ranchers and farmers in rural America. Image source: Getty Images.

Added employee benefits during this time include a $2-per-hour raise for those working, two weeks of additional sick leave, and free telehealth visits. Staff was encouraged to stay home if they felt sick, and more than 1,500 employees took advantage of the extended sick leave. In addition, it set aside $2 million for an employee assistance fund and the creation of a foundation to help rural communities deal with the COVID-19 recovery efforts.

For customers, new plexiglass shields at the cashier counters along with contactless payment options help ensure social distancing during checkout. Designated shopping hours for seniors have been added along with additional labor in stores to help provide a safe shopping experience. Lastly, the supply chain has been adjusted to stock more inventory of the fast-moving consumables customers depend on. 

For shareholders, the company is shoring up its cash position. It suspended share buybacks, curtailed spending, and safeguarded the dividend. In addition to the $800 million in cash and cash equivalents on the balance sheet, Tractor Supply executed an additional $550 million in loans and has access to an additional $165 million if needed.

In addition to these short-term actions, the company is making longer-term changes that will strengthen its position coming out of the pandemic.

Thriving through recessions

In early April, the retailer announced it would add 5,000 employees across its stores and distribution centers to cover new safety-related tasks and provide additional flexibility to cover for sick workers. An example of where these additional resources are being used is Tractor Supply's new curbside pickup option for online orders, meaning customers don't have to enter the store. 

Further enhancements to the customer experience include more mobile point-of-sale handheld devices that will be rolled out to stores. These allow an Apple-like in-store retail experience in that a device-carrying staff member can ring up customer orders on the spot. Same-day delivery options for online orders have been ramped up from 20% of locations to 80%. Even though this service is meant to reduce in-store traffic, it's something customers can use long after the coronavirus is in the rearview mirror.

These improvements are helping retain existing customers and winning new ones while many other retailers remain closed. Difficult times seem to benefit this retailer. During the 2008-09 financial crisis, revenue increased 19% over the two-year period, and the stock trounced the S&P 500.

The bottom line for investors

Shareholders can sleep well with this exceptional retail operator in their portfolios. Even though Tractor Supply management withdrew guidance for the upcoming year, the future looks bright for investors who take a long-term view. Over the last 10 years, the stock has handed shareholders an incredible 500%-plus in gains, even before including dividends.

Looking out over the next decade, this rural retail specialist should thrive and bring its shareholders along for the ride.