Back to top

Image: Bigstock

Is a Beat in Store for Tractor Supply (TSCO) in Q4 Earnings?

Read MoreHide Full Article

Tractor Supply Company (TSCO - Free Report) is slated to report fourth-quarter 2021 results on Jan 27, before the opening bell. The leading ranch store retailer is expected to have witnessed revenue and earnings growth in the to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.83 per share, suggesting an increase of 11.6% from the year-ago period’s reported figure. The consensus mark has been unchanged in the past 30 days. For fourth-quarter revenues, the consensus mark is pegged at $3.2 billion, suggesting 11.6% growth from the prior-year quarter’s reported figure. For 2021, the Zacks Consensus Estimate for TSCO’s sales and EPS suggests respective growth of 19% and 24% from the year-ago period’s reported figures.

In the last reported quarter, the company recorded an earnings beat of 18.2%. It has delivered an earnings surprise of 22.8%, on average, in the trailing four quarters.

Tractor Supply Company Price and EPS Surprise

 

Tractor Supply Company Price and EPS Surprise

Tractor Supply Company price-eps-surprise | Tractor Supply Company Quote

Factors to Note

Tractor Supply has been gaining from strength in its Life Out Here Strategy and healthy customer trends. Its e-commerce business and Neighbor's Club loyalty program also bode well. Increased focus on growth initiatives, including the expansion of store base and the incorporation of technological advancements to induce traffic and drive the top line, is likely to have aided the fourth-quarter performance.

Notably, management, on its last reported quarter’s earnings call, expected 2021 net sales of $12.6 billion, marking an improvement from the previously mentioned $12.1-$12.3 billion. Comps have been anticipated to grow 16%, up from 11-13% mentioned earlier.

The company has also been benefiting from the integration of its physical and digital operations to offer consumers a seamless shopping experience. TSCO’s omni-channel investments, including curbside pickup; same-day, next-day delivery; a re-launched website; a new mobile app; and the Neighbor's Club loyalty program, have been aiding digital sales.

Tractor Supply has been progressing well with its growth efforts, such as Life Out Here and ‘ONETractor’ strategies. As part of its Life Out Here Strategy, management has been on track with Project Fusion remodels and Side Lot transformation to remain nationally strong and locally relevant by bringing the latest merchandising strategies to life. Management in its last earnings call anticipated completing 150 Side Lots by 2021. These have been significant investments toward stores and are expected to have boosted productivity across the existing and new stores. Gains from these efforts are likely to get reflected in its fourth-quarter results.

However, the company has been witnessing increased capital spending due to new in-store initiatives and providing technology support for the Life Out Here Strategy. Product cost inflation, escalated freight expenses that are inclusive of the domestic and import costs, and supply-chain constraints are likely to have acted as deterrents.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Tractor Supply this season. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tractor Supply has a Zacks Rank #3 and an Earnings ESP of +0.55%.

Other Stocks With Favorable Combination

Here are some more companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:

Macy’s (M - Free Report) has an Earnings ESP of +7.71% and it currently sports a Zacks Rank of 1. The company is likely to register an increase in the bottom line when it reports fourth-quarter 2021. The Zacks Consensus Estimate for quarterly earnings has moved 2.6% to $1.97 per share in the past 30 days, suggesting a 146.3% rise from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.

Macy’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.44 billion, which suggests a rise of 24.5% from the figure reported in the prior-year quarter. M has delivered an earnings beat of 313.5%, on average, in the trailing four quarters.

Five Below (FIVE - Free Report) currently has an Earnings ESP of +0.71% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2021. The Zacks Consensus Estimate for quarterly earnings has been unchanged at $2.48 per share, projecting 12.7% growth from the year-ago quarter’s reported number.

Five Below’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.01 billion, which suggests a rise of 17.1% from the figure reported in the prior-year quarter. FIVE has delivered an earnings beat of 22.4%, on average, in the trailing four quarters.

DICK’S Sporting Goods (DKS - Free Report) currently has an Earnings ESP of +4.46% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2021. The Zacks Consensus Estimate for quarterly earnings has moved north by 21.1% to $3.38 per share in the past 30 days, projecting a 39.1% rise from the year-ago quarter’s reported number.

DICK’S Sporting’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.31 billion, which suggests a rise of 6% from the figure reported in the prior-year quarter. DKS has delivered an earnings beat of 104.2%, on average, in the trailing four quarters.