Tractor Supply Company
) is operating on all cylinders. The farm and ranch retailer
recently preannounced first quarter sales that topped $1 billion
for the first time in the company's history. Shares of this Zacks
#1 Rank (Strong Buy) continue to scream higher, hitting new
all-time highs almost daily.
Tractor Supply Company operates 1117 stores in 44 states that
supply products for recreational farmers and ranchers. The retailer
focuses on the needs of those who live in rural areas, including
tradesmen and small businesses.
The company offers merchandise in areas such as equine, pet and
small animal products; hardware, truck and towing products;
seasonal lawn and garden products; maintenance products; and
recreational clothing and footwear.
First Quarter Sales Jump 22%
On Apr 12, Tractor Supply announced a first quarter earnings update
ahead of its actual Apr 25 earnings report.
Sales jumped 22% to a record $1 billion from $836.6 million a year
ago. Same store sales rose 11.5%.
That warmer than expected spring? It boosted sales in the quarter.
Earnings per share in the quarter were expected to be between 53
and 55 cents. The company estimated that 9 to 11 cents of that was
pull forward from the second quarter due to the early spring.
Gross margin was also expected below that of last year's level due
to markdowns on winter seasonal merchandise in January and February
because of the early warm weather.
Raised 2012 Guidance
Given the strong first quarter, Tractor Supply raised full year
sales guidance to $4.61 to $4.68 billion from $4.56 to $4.66
Same store sales are also expected to be hotter, rising between 4%
and 5.5%, up from the prior guidance of 3% to 5%.
The 2012 Zacks Consensus Estimate Climbs
Given all the good news about the quarter from the company, it's
not surprising that the analysts have all been busy raising first
quarter and full year estimates.
For the quarter, the Zacks Consensus is now calling for 54 cents
which is, not surprisingly, in the middle of the company's own
updated guidance range of 53 cents to 55 cents.
For the full year, 16 out of 19 estimates have been revised higher
in the last 30 days. That has pushed the 2012 Zacks Consensus up to
$3.64 from $3.50 per share.
That is 2012 earnings growth of 21%.
A Premium To Be Paid for Tractor Supply
Tractor Supply is trading at a premium to its peers. It has a
forward P/E of 27. Its peers trade, on average, with a forward P/E
of just 18.
But investors are betting on continued growth. It has a 1-year
return on equity (ROE) of 23.5%, well above its peers at 13.5%.
The chart is a thing of beauty. Tractor Supply is the perfect
Look for its actual first quarter report and conference call on Apr
25. It should be a hot one.
Tracey Ryniec is the Value Stock Strategist for
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
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