Farm supplies retailer Tractor Supply Company ( TSCO - Analyst Report ) came up with a preview of its first quarter 2012 results. Citing robust sales performance in the first quarter, the company raised its earnings forecast for the quarter as well as for fiscal 2012.

Net sales during the first quarter surged 22.0% to $1.02 billion from $836.6 million in the prior-year quarter. Net sales were ahead of the Zacks Consensus Estimate of $935 million. An early spring in 2012 helped boost same store sales, which rose 11.5% in the first quarter.

Further, the company indicated that each quarter of 2012 will have a delayed start by one week, compared to fiscal 2011, due to the inclusion of 53^rd week in fiscal 2011. Mitigating the effect of the week shift, first quarter 2012 same store sales registered an increase of 7.6%.

First quarter results at Tractor Supply benefited mainly from the structural improvements made over the years. This enabled the company to adjust its offerings to suit customer demand and to promptly respond to events, such as the early onset of spring in March 2012.

Looking into 2012, the company expects its profits to grow continually, given the right mix of products and marketing plans to maintain customer footfall.

Encouraged by such robust sales, the company expects its first quarter earnings to come in the range of 53 cents to 55 cents and emphasized the same in its business plan. This includes an estimated 9 cents to 11 cents gain from shift of spring sales into the first quarter instead of the second quarter. The company’s revised first quarter guidance is way above the current Zacks Consensus Estimate of 31 cents per share.

Further, the company expects gross margin in the first quarter to be a little shy of the year-ago level, mainly on account of a warmer January and February that called for markdowns to sell through winter seasonal merchandise.

Further citing strong first quarter results, the company raised its fiscal 2012 earnings guidance range to $3.52 to $3.60 per share, compared with the earlier forecast of $3.38 to $3.46 per share. The Zacks Consensus Estimate for fiscal 2012 stands at $3.50, slightly below the lower-end of the company’s revised fiscal year guidance.

Net income for the year is estimated to reach $260 – $265 million, above the prior estimate of $246 – $253 million. Net sales forecast for fiscal 2012 has also been raised to $4.61 – $4.68 billion versus the previous guidance of $4.56 – $4.66 billion. In fiscal 2012, same store sales are expected to register an increase of 4.0% to 5.5%, up from the prior forecast of 3% to 5%.

Tractor Supply is scheduled to release its first quarter 2012 financial results after market close on Wednesday, April 25, 2012.

Our Take

We believe that the company’s efficiency in managing inventory level, strategic merchandise sourcing, private branding and cost control measures will help to retain its momentum of increasing trends both in its top and bottom line.

The company operates in a highly fragmented industry and faces competition from larger retailers like The Home Depot Inc. ( HD - Analyst Report ) .

Tractor Supply’s shares maintain a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating. Our long-term recommendation on the stock remains ‘Neutral’.