Yahoo Finance Factors to Note Ahead of Tractor Supply's (TSCO) Q4 Earnings
Tractor Supply Company TSCO is likely to register increases in the top and bottom lines when it reports fourth-quarter 2022 results on Jan 26, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.88 billion, indicating growth of 16.8% from the prior-year reported figure.
The bottom line of the largest rural lifestyle retailer in the United States is expected to have increased year over year. The Zacks Consensus Estimate for earnings per share for the fourth quarter has been unchanged at $2.35 in the past 30 days. The figure suggests growth of 21.8% from the year-ago period.
The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $14.08 billion, suggesting 10.6% growth from the prior-year quarter’s reported figure. For 2022 earnings, the consensus mark is pegged at $9.62, suggesting growth of 11.7% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.
We expect the company’s fourth-quarter total revenues to increase 16.3% year over year to $3,860.4 million and the bottom line to decline 19.5% to $2.31 per share.
Tractor Supply has a trailing four-quarter earnings surprise of 5.8%, on average. In the last reported quarter, this Brentwood, TN-based company’s earnings surpassed the Zacks Consensus Estimate by 0.5%.
Tractor Supply Company Price and EPS Surprise
Tractor Supply Company price-eps-surprise | Tractor Supply Company Quote
Key Factors to Note
Tractor Supply has been benefiting from its robust e-commerce business, strong demand and growth endeavors. Strength in the Life Out Here Strategy and healthy demand for its product categories have been aiding its top and bottom lines for the past few quarters. Continued sturdy demand for everyday merchandise, including consumable, usable and edible products, as well as strength in seasonal categories, is likely to have boosted the company’s performance in the fourth quarter.
On the last reported quarter’s earnings call, management expected the recent acquisition of Orscheln Farm and Home to contribute $75 million to sales in the fourth quarter and 2022. Consequently, it estimated net sales of $14.06-$14.12 billion for 2023.
We expect 2022 net sales of 14,058.7 million, suggesting a year-over-year increase of 10.4%. Our estimate indicates comp growth of 5.6% for 2022, which is in sync with the company’s forecast of 5.4-5.8% growth.
The company’s estimate for 2022 operating margin is anticipated to be 10.1-10.15%, while we expect an operating margin of 10.1%. Our model suggests 7.7% growth in net income for 2022 to $1,074 million, which is in line with the company’s estimate of net income of $1.07-$1.08.
Earnings per share are likely to be $9.55-$9.63. The view also includes gains from the 53rd week in 2022, which is expected to contribute 1.5 percentage points to the top line and 15 cents to the bottom line. We expect earnings per share of $9.59 for 2022.
Given the changing consumer trends, the company has been focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. It has been on track with the ‘ONETractor’ strategy to connect store and online shopping. TSCO’s omni-channel investments include curbside pickup, same-day and next-day delivery, a re-launched website, and the new mobile app. Gains from these efforts are expected to have led to strong e-commerce growth in the to-be-reported quarter.
The company is also expected to have benefited from the progress on its “Life Out Here” strategy and everyday low pricing. Its Neighbor's Club loyalty program has also been boosting sales. Tractor Supply has been on track with the Project Fusion remodels and Side Lot transformation to remain nationally strong and locally relevant by bringing the latest merchandising strategies to life. These have been significant investments toward stores and are expected to have boosted productivity across the existing and new stores.
However, TSCO has been witnessing rising inflationary and supply-chain issues. Higher product cost inflation and transportation costs have been hurting Tractor Supply’s gross margin for a while. Elevated costs, stemming from increased wage rates, have been acting as deterrents. The company has been witnessing increased investments in the Life Out Here strategic efforts. These costs are likely to have marred its performance in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not 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 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 a Zacks Rank #3 and an Earnings ESP of -0.53%.
Stocks With Favorable Combination
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:
American Eagle Outfitters AEO currently has an Earnings ESP of +3.25% and a Zacks Rank of 2. The company is likely to register declines in the top and bottom lines when it reports fourth-quarter 2022 numbers. The Zacks Consensus Estimate for AEO’s quarterly earnings per share of 28 cents suggests a decline of 20% from the year-ago reported number.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle's quarterly revenues is pegged at $1.47 billion, which suggests a rise of 2.8% from the prior-year quarter’s reported figure. AEO has a trailing four-quarter negative earnings surprise of 5%, on average.
Abercrombie & Fitch ANF currently has an Earnings ESP of +3.69% and a Zacks Rank #2. The company is likely to register top-line growth when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 79 cents suggests a decline of 30.7% from the $1.14 reported in the year-ago quarter.
The Zacks Consensus Estimate for Abercrombie & Fitch's quarterly revenues is pegged at $1.18 billion, which indicates an improvement of 1.6% from the figure reported in the prior-year quarter. ANF has a trailing four-quarter negative earnings surprise of 142.8%, on average.
AutoZone AZO currently has an Earnings ESP of +7.99% and a Zacks Rank #3. The company is expected to register top-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $21.22 suggests a 4.8% decline from the year-ago quarter.
AutoZone’s top line is anticipated to increase year over year. The consensus mark for revenues is pegged at $3.53 billion, indicating an improvement of 4.8% from the figure reported in the year-ago quarter. AZO has a trailing four-quarter earnings surprise of 13.1%, on average.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
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Tractor Supply Company (TSCO) : Free Stock Analysis Report
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