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Tractor Supply Q1 Earnings: Is TSCO Stock Poised to Beat?

We expect leading retail farm and ranch store chain, Tractor Supply Company TSCO to beat expectations when it reports first-quarter 2016 results on Apr 20.

Why a Likely Positive Surprise?

Our proven model shows that Tractor Supply is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at 50 cents and the Zacks Consensus Estimate is pegged at 46 cents. So the ensuing +8.70% ESP and the company’s Zacks Rank #3 (Hold) make us reasonably confident of an earnings beat.

What is Driving the Better-than-Expected Earnings?

Tractor Supply has outperformed the Zacks Consensus Estimate by an average of 1.4% over the past four quarters. Though weather impacted sales last quarter, the company managed to keep inventories in place and markdowns remained favorable. Also, sales of cold weather-related products began to pick up as weather normalized. Further, the company is confident of its marketing and merchandising actions as well as ongoing strategic investments, particularly its omnichannel efforts. All these factors helped Tractor Supply commence 2016 on an upbeat note, making us optimistic about the upcoming results.

Stocks to Consider

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:

McDonald's Corp. MCD has an Earnings ESP of +1.74% and a Zacks Rank #2 (Buy).

Lithia Motors Inc. LAD has an Earnings ESP of +0.65% and a Zacks Rank #2.

Cabela's Incorporated CAB has an Earnings ESP of +10.81% and a Zacks Rank #3.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
LITHIA MOTORS (LAD): Free Stock Analysis Report
 
MCDONALDS CORP (MCD): Free Stock Analysis Report
 
TRACTOR SUPPLY (TSCO): Free Stock Analysis Report
 
CABELAS INC (CAB): Free Stock Analysis Report
 
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