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Tractor Supply's (TSCO) Q3 Earnings Are Likely to Improve Y/Y

Zacks Equity Research

Tractor Supply Company TSCO is slated to release third-quarter 2019 results on Oct 24, before the opening bell.

The company’s earnings fell short of the Zacks Consensus Estimate by 0.6% in second-quarter 2019. However, the company has average earnings beat of 6.1% for the trailing four quarters.

Let’s see how things are shaping up for this rural lifestyle retailer’s upcoming quarterly release.

How Have Estimates Shaped Up?

The Zacks Consensus Estimate for Tractor Supply’s third-quarter earnings is currently pegged at $1.04, which indicates year-over-year growth of about 9.5%. However, we note that the consensus estimate has moved down by a penny in the last 30 days.

Tractor Supply Company Price and EPS Surprise


Tractor Supply Company Price and EPS Surprise
Tractor Supply Company Price and EPS Surprise

Tractor Supply Company price-eps-surprise | Tractor Supply Company Quote

For quarterly sales, the consensus mark is pinned at $1,999 million, suggesting an improvement of more than 6% from the year-ago quarter. Moreover, the Zacks Consensus Estimate for comparable store sales (comps) calls for growth of about 3.1% year over year.

Factors at Play

Tractor Supply has been gaining from its solid omni-channel and store-growth endeavors along with sturdy merchandising and marketing initiatives. Notably, its ‘ONETractor’ initiative, which integrates the company’s physical and digital operations, is aiding performance. In addition, Tractor Supply’s third-quarter performance is likely to reflect gains from the Petsense buyout.

Moreover, Tractor Supply is reaping benefits from its mobile point-of-sale and Buy Online Pick Up in Store capabilities as well as loyalty program and stockyard kiosk initiatives. Impressively, the company delivered double-digit e-commerce sales growth for 28th straight time in second-quarter 2019. Tractor Supply has been experiencing positive comps for a while now. Improvement across all geographic regions and strength in everyday merchandise, including consumable, usable and edible products, is further aiding comps.

These are likely to have played a major role in driving the company’s top line in the quarter under review. However, deleverage in SG&A expenses may show on margins.

What Does the Zacks Model Say?

Our proven model does not conclusively predict an earnings beat for Tractor Supply this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Tractor Supply carries a Zacks Rank #3, its Earnings ESP of -3.05% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Burlington Stores, Inc. BURL has an Earnings ESP of +0.09% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation TGT has an Earnings ESP of +1.79% and a Zacks Rank #2.

The Home Depot, Inc. HD has an Earnings ESP of +0.23% and a Zacks Rank #3.

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