Why Tractor Supply (TSCO) Looks Poised for Earnings Beat in Q3
Tractor Supply Company TSCO is likely to register increases in the top and bottom lines when it reports third-quarter 2022 results on Oct 20, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.28 billion, indicating growth of 8.8% from the prior-year reported figure.
The bottom line of the largest rural lifestyle retailer in the United States is expected to have increased year over year. The Zacks Consensus Estimate for earnings per share for the third quarter has moved up by a penny to $2.09 in the past 30 days. The figure suggests growth of 7.2% from the year-ago period.
Tractor Supply has a trailing four-quarter earnings surprise of 10.2%, on average. In the last reported quarter, this Brentwood, TN-based company’s earnings were in line with the Zacks Consensus Estimate.
Tractor Supply Company Price and EPS Surprise
Tractor Supply Company price-eps-surprise | Tractor Supply Company Quote
Key Factors to Note
Tractor Supply has been benefiting from its robust e-commerce business, strong demand and strategic growth endeavors. Strength in the Life Out Here Strategy and healthy demand for its product categories have been aiding its top and bottom lines for the past few quarters. Continued sturdy demand for everyday merchandise, including consumable, usable and edible products, as well as strength in seasonal categories, is likely to have boosted the performance in the third quarter.
Given the changing consumer trends, the company has been focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. It is on track with the ‘ONETractor’ strategy to connect store and online shopping. TSCO’s omni-channel investments include curbside pickup, same-day and next-day delivery, a re-launched website, and the new mobile app. Gains from these efforts are expected to have led to strong e-commerce growth in the to-be-reported quarter.
The company is also expected to have benefited from the progress on its “Life Out Here” strategy and everyday low pricing. Its Neighbor's Club loyalty program has also been boosting sales. Tractor Supply has been on track with the Project Fusion remodels and Side Lot transformation to remain nationally strong and locally relevant by bringing the latest merchandising strategies to life. These have been significant investments toward stores and are expected to have boosted productivity across the existing and new stores.
However, TSCO has been witnessing rising inflationary and supply-chain issues. Higher product cost inflation and transportation costs have been hurting Tractor Supply’s gross margin for a while. Elevated costs, stemming from increased wage rates, have been acting as deterrents. The company has been witnessing increased investments in the Life Out Here strategic efforts. These costs are likely to have marred its performance in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for Tractor Supply this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Tractor Supply has a Zacks Rank #2 and an Earnings ESP of +0.68%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Chipotle Mexican Grill CMG currently has an Earnings ESP of +2.11% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $9.09 suggests growth of 29.5% from the year-ago reported number.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chipotle's quarterly revenues is pegged at $2.23 billion, which suggests a rise of 14.4% from the prior-year quarter’s reported figure. CMG has a trailing four-quarter earnings surprise of 6.2%, on average.
The Kroger Co. KR currently has an Earnings ESP of +0.31% and a Zacks Rank #2. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 80 cents suggests an improvement of 2.6% from 78 cents reported in the year-ago quarter.
The Zacks Consensus Estimate for Kroger's quarterly revenues is pegged at $33.99 billion, which indicates an improvement of 6.5% from the figure reported in the prior-year quarter. KR has a trailing four-quarter earnings surprise of 15.7%, on average.
Costco Wholesale COST currently has an Earnings ESP of +0.53% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.15 suggests 6.1% growth from the year-ago quarter.
Costco Wholesale’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $54.9 billion, indicating an improvement of 9.2% from the figure reported in the year-ago quarter. COST has a trailing four-quarter earnings surprise of 7.7%, on average.
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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
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