Here's How Tractor Supply Is Placed Before Q1 Earnings

Tractor Supply Company TSCO is likely to register an increase in the top and bottom lines when it reports first-quarter 2024 results on Apr 25, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.40 billion, indicating a 3% jump from the year-ago reported figure.
The bottom line of the largest rural lifestyle retailer in the United States is expected to have risen year over year. The Zacks Consensus Estimate for earnings per share for the first quarter has remained stable at $1.70 in the past 30 days, suggesting 3% growth from the year-ago period's reported figure.
Tractor Supply has a trailing four-quarter earnings surprise of 0.5%, on average. In the last reported quarter, this Brentwood, TN-based company's earnings missed the Zacks Consensus Estimate by 2.6%.

Key Factors to Note

Tractor Supply has been experiencing momentum, driven by sturdy demand and strong market share gains. The company has been gaining from demand for its core merchandise, including consumable, usable and edible products. Its buyout of Orscheln Farm and Home, and store openings have been aiding its performance. The company has been benefiting from its Life Out Here Strategy and the Neighbor's Club membership program, which is likely to have driven its sales in the to-be-reported quarter. The strategy is essentially based on five key pillars: customers, digitization, execution, team members and total shareholder return.
Tractor Supply has been focusing on its growth initiatives, which include the expansion of its store base and the incorporation of technological advancements to induce traffic and drive the top line. The company's Project Fusion and Side Lot model transformations have been significant investments toward stores. These store investments target achieving higher market share and boosting productivity across the existing and new stores.
TSCO's ‘ONETractor' strategy, which is aimed at connecting stores and online shopping, appears encouraging too. Its omnichannel investments include curbside pickup, same-day and next-day delivery, a re-launched website and a new mobile app. The company's rebranding of Petsense by Tractor Supply and the expansion of its Neighbor's Club program to Petsense stores received positive customer feedback. This move is likely to have enabled it to gain pet customers for both banners.
However, Tractor Supply has been grappling with higher depreciation and amortization costs, impacts of higher medical claims and inflationary pressures. Consequently, the company has been witnessing higher selling, general and administrative (SG&A) expenses. Our model indicates a 3.6% rise in SG&A expenses and a 50-bps increase in SG&A expense rate on a year-over-year basis for the first quarter. Nonetheless, all the aforesaid strengths are likely to have boosted the company's performance in the first quarter.

What the Zacks Model Unveils

Our proven model conclusively predicts 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 chances of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Tractor Supply has an Earnings ESP of +0.50% and a Zacks Rank of 2 at present.

Other Stocks Poised to Beat Earnings Estimates

Here are a few more companies that have the right combination of elements to post an earnings beat:
Central Garden & Pet CENT currently has an Earnings ESP of +4.32% and a Zacks Rank of 1. CENT is likely to register bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $894.5 million, suggesting a 1.6% drop from the figure reported in the year-ago quarter.
The consensus estimate for CENT's fiscal second-quarter earnings is pegged at 83 cents a share, up 15.3% from the year-ago quarter. The consensus mark has risen a couple of cents in the past 30 days.
Chipotle Mexican Grill CMG currently has an Earnings ESP of +1.86% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for CMG's quarterly revenues is pegged at $2.67 billion, which implies growth of 12.8% from the year-ago quarter's reported figure.
The consensus estimate for Chipotle's earnings has increased 0.4% to $11.56 per share in the past seven days. The consensus estimate for earnings suggests growth of 10.1% from the year-ago quarter's reported figure. CMG has delivered an earnings beat of 9.1%, on average, in the trailing four quarters.
Beacon Roofing Supply BECN has an Earnings ESP of +0.82% and a Zacks Rank of 3 at present. BECN is likely to register top-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.88 billion, suggesting 8.5% growth from the figure reported in the year-ago quarter.
The consensus estimate for Beacon Roofing's first-quarter earnings is pegged at 35 cents per share, suggesting a 47.8% decline from the figure reported in the year-ago quarter. The consensus estimate for earnings has remained unchanged in the past 30 days. BECN has delivered an earnings beat of 10.3%, on average, in the trailing four quarters.

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