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What to Expect from Tractor Supply (TSCO) in Q3 Earnings?

Tractor Supply CompanyTSCO is slated to post third-quarter 2015 results after the market closes on Oct 21, 2015. In the previous quarter, the company's earnings were in line with the Zacks Consensus Estimate. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter's Results

Tractor Supply has delivered an average positive earnings surprise of 4.2% in the trailing four quarters, with better-than-expected results in three of them. In the last quarter, it gained from efficient merchandise and inventory management that boosted sales and margins.

Encouraged by its performance in the first half of 2015, the company is optimistic about its results in the second half of the year. The company is confident of its late summer and early fall performance based on its marketing and merchandising actions as well as ongoing strategic investments. Hence, the company has raised its guidance for 2015.

Moreover, the company has been benefiting from its consistent focus on revamping through expansion and enhancement of store productivity. These measures will boost its top line and, in turn, enhance profitability. Further, going forward, the company intends to remain committed to efficient inventory management, shipment timing and marketing strategies. We believe that these constant endeavors keep the company well positioned for its upcoming results.

However, the seasonal nature of the company's business and macroeconomic headwinds that may weigh on its performance raises some concern.

Earnings Whispers?

Our proven model does not conclusively show that Tractor Supply is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Tractor Supply currently has an Earnings ESP of -1.61%. This is because the Most Accurate estimate of 61 cents is below the Zacks Consensus Estimate of 62 cents.

Zacks Rank: Tractor Supply's Zacks Rank #3 (Hold) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

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

Starbucks Corporation SBUX has an Earnings ESP of +2.33% and a Zacks Rank #2 (Buy).

Amazon.com Inc.'s AMZN Earnings ESP is at +380.00% and it carries a Zacks Rank #3.

Boston Beer Co. Inc. SAM with an Earnings ESP of +4.26% holds a Zacks Rank #3.

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TRACTOR SUPPLY (TSCO): Free Stock Analysis Report

AMAZON.COM INC (AMZN): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

BOSTON BEER INC (SAM): 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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