Tractor Supply CEO says there's still ‘significant migration' out of urban areas

• Tractor Supply CEO Hal Lawton told CNBC's Jim Cramer on Thursday that a substantial number of Americans are moving out of cities, and many are headed to rural areas.
• Lawton attributed some of this migration to affordable housing options, saying millennial homebuyers facing high mortgage rates are finding budget-friendly offerings in rural areas.

Tractor Supply CEO Hal Lawton told CNBC's Jim Cramer on Thursday that a substantial number of Americans are moving out of cities, and many are headed to rural areas.

"Rural America is alive and well, and growing, and really leading in many ways in this country," Lawton said, adding the population outflows spiked during the pandemic years but do persist.

"They've continued, albeit to a lesser absolute number, but net we're still seeing significant migration out of urban America, and most of that migration, or a lot of it, is going into rural America," Lawton said.

Tractor Supply is a retail chain that sells equipment for home improvement, such as supplies for gardening and farming.

Lawton told Cramer that the company has been dealing with business headwinds, with consumer spending trends swinging from goods to services. But he expressed optimism for the future, saying Tractor Supply can "begin to see light at the end of the tunnel now against those headwinds."

Lawton attributed some of this migration to affordable housing options, saying millennial homebuyers facing high mortgage rates are finding budget-friendly offerings in rural areas. What's more, he told Cramer that the millennial generation appreciates certain aspects of rural life, such as growing fresh produce.

He also said chickens have been a great new source of growth over the past several years. He claimed that one in five customers in Tractor Supply's loyalty program, Neighbor's Club, owns chickens, adding that the majority of the customer base is in the program.

"Chickens are really the new third pet out there," Lawton told Cramer. "It's attracting new customers, we're seeing them attracted to new breeds, organic feeds, and, most importantly, it creates a one of a kind retail theater in our stores. And customers just come in all day long looking to see the chickens."

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