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Tractor Supply (TSCO) Q4 Earnings: A Beat in the Cards?

We expect farm and ranch store retailer, Tractor Supply CompanyTSCO to beat expectations when it reports fourth-quarter 2016 results after the market closes on Feb 1.

Last quarter, the company reported an earnings surprise of 1.52%. Moreover, the bottom line has outperformed the Zacks Consensus Estimate by an average of 2.6% in the trailing four quarters. Let's see how things are shaping up for this announcement.

Tractor Supply Company Price and EPS Surprise

Tractor Supply Company Price and EPS Surprise | Tractor Supply Company Quote

Why a Likely Positive Surprise?

Our proven model shows that Tractor Supply may beat earnings because it has the right combination of the two key components.

Zacks ESP: Tractor Supply currently has an Earnings ESP of +1.09%. This is because the Most Accurate estimate stands at 93 cents, while the Zacks Consensus Estimate is pegged lower at 92 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You may uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Tractor Supply carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

The combination of Tractor Supply's Zacks Rank #2 and positive ESP make us reasonably confident of a positive earnings beat.

What's Driving the Better-than-Expected Earnings?

Tractor Supply remains well positioned for growth given its smooth progress on store expansion and technological advancements. The company remains on track with its initiatives, which enable it to generate healthy sales and gain market share.

These catalysts pushed the shares of Tractor Supply up 15.8% in the past three months, outperforming the Zacks categorized Retail-Miscellaneous/Diversified industry's growth of 3.6%.

Further, Tractor Supply has been concentrating on efficient inventory management to minimize the impact of weather on its business and capitalize on seasonal demand. Incidentally, the company is on track with its investments in new systems, including demand planning, improved pricing, inventory allocation, all of which are directed toward generating supply chain efficiencies in order to better manage global inventories. Moreover, Tractor Supply's consistent cost-cutting efforts, along with strategic buyouts like that of Petsense, bode well.

All these factors keep us optimistic about the company's performance in the to-be-reported quarter.

Other Stocks that Warrant a Look

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

Michael Kors Holdings Ltd. KORS , scheduled to report earnings on Feb 7, 2017, currently has an Earnings ESP of +2.45% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Styrong Buy) stocks here .

Yum Brands Inc. YUM , slated to release earnings on Feb 8, 2017, currently has an Earnings ESP of +2.82% and a Zacks Rank #3 (Hold).

Campbell Soup Company CPB , expected to release earnings on Feb 23, 2017, currently has an Earnings ESP of +1.15% and a Zacks Rank #2.

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Campbell Soup Company (CPB): Free Stock Analysis Report

Yum! Brands, Inc. (YUM): Free Stock Analysis Report

Tractor Supply Company (TSCO): Free Stock Analysis Report

Michael Kors Holdings Limited (KORS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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