Markets

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.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


Click to get this free report

Office Depot, Inc. (ODP): Free Stock Analysis Report

Tractor Supply Company (TSCO): Free Stock Analysis Report

Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More