Tractor Supply (TSCO) to Post Q2 Earnings: What's in Store?

Tractor Supply Company TSCO is slated to report second-quarter 2020 results on Jul 23, before the opening bell. In the last reported quarter, the company reported an earnings beat of 1.4%. However, it delivered a negative earnings surprise of 0.19%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.59, suggesting an increase of 43.9% from the year-ago period’s reported figure. Notably, the consensus mark has gone up by 6 cents in the past seven days. For second-quarter revenues, the consensus mark is pegged at $2.99 billion, suggesting 27.1% growth from the prior-year quarter’s reported figure.

Factors to Note

On May 27, Tractor Supply informed that it witnessed increased sales across its product categories, channels and geographic regions in the second quarter. Moreover, the company’s online business has been seeing improvement since the beginning of second-quarter 2020. This can be attributed to higher demand from customers as they opt for the newly launched contactless curbside delivery as well as buy online, pickup at store option.

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 second-quarter 2020, management predicts a year-over-year rise in net sales of 24-29%. Comparable store sales are anticipated to increase 20-25% in the same period. Additionally, Tractor Supply is optimistic about its gross profit performance and expects to witness the expansion of gross margin for the second quarter. Further, management envisions earnings of $2.45-$2.65 per share for the second quarter.

However, net additional operating expenses, owing to the coronavirus pandemic, are anticipated to be at the higher end of the company’s previous guidance of $30-$50 million. These costs are attributable to the appreciation bonus for its frontline team members, increased store labor, and higher safety and cleaning costs.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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 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 #2, an Earnings ESP of -0.54% makes surprise prediction difficult.

Stocks With Favorable Combinations

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:

Sprout Farmers Market, Inc. SFM currently has an Earnings ESP of +2.63% and it flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Office Depot, Inc. ODP presently has an Earnings ESP of +2.44% and a Zacks Rank #2.

Builders FirstSource, Inc. BLDR currently has an Earnings ESP of +16.98% and a Zacks Rank #2.

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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.

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