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Tractor Supply Gears Up for Q3 Earnings: What Awaits the Stock?

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Tractor Supply Company (TSCO - Free Report) is likely to register an increase in the top line when it reports third-quarter 2024 results on Oct. 24, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.5 billion, indicating a 2.2% jump from the year-ago figure.

The bottom line of the leading rural lifestyle retailer in the United States is expected to decline year over year. The Zacks Consensus Estimate for earnings per share has remained unchanged at $2.22 in the past 30 days, indicating a 4.7% fall from the year-ago period’s figure.

Tractor Supply has a trailing four-quarter earnings surprise of 3.2%, on average. In the last reported quarter, this Brentwood, TN-based company’s earnings missed the Zacks Consensus Estimate by 0.3%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Key Factors to Influence TSCO’s Q3 Results

Tractor Supply’s quarterly performance is likely to have benefited from sturdy demand and strong market share gains. The company has been gaining from demand for its core merchandise including consumable, usable and edible products. TSCO’s focus on tailoring its products to meet the everyday needs of its rural customers has gone a long way in aiding its success. In addition, the execution of its everyday low-price strategy is expected to continue bolstering its performance in the third quarter.

TSCO’s ‘ONETractor’ strategy, which is aimed at connecting stores and online shopping, appears encouraging. The company is benefiting from its Life Out Here Strategy and the Neighbor’s Club membership program, which are likely to have driven its sales in the to-be-reported quarter. The buyout of Orscheln Farm and Home and Petsense by Tractor Supply stores have been aiding its performance.

On the flip side, the company has been witnessing softness in goods. The ongoing shift in spending from goods to services has been a headwind. TSCO has been witnessing softness in clothing, footwear and décor. It has also been facing softness in the hardlines products of the business, including ag, fencing and pet kennels. Management, in its last earnings call, cited that the company plans to report a headwind from deflation in the third quarter.

Tractor Supply has been grappling with higher depreciation and amortization costs, and costs related to the opening of a distribution center. The company has been witnessing higher selling, general and administrative (SG&A) expense rates resulting from planned growth investments, including increased depreciation and amortization, and deleveraged fixed costs.

Our model indicates a 5.4% year-over-year rise in SG&A expenses for the third quarter and an 80-bps increase to 24.8% in the SG&A expense rate on a year-over-year basis. Depreciation and amortization expenses are expected to increase 21.9% year over year.

What the Zacks Model Unveils for TSCO

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. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Tractor Supply Company Price and EPS Surprise

Tractor Supply Company Price and EPS Surprise

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

Tractor Supply has an Earnings ESP of 0.00% and a Zacks Rank # 4 (Sell) at present.

Stocks Poised to Beat on Earnings 

Here are a few companies that have the right combination of elements to post an earnings beat this time around:

Abercrombie & Fitch (ANF - Free Report) has an Earnings ESP of +3.97% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ANF is likely to register top-line growth when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.2 billion, indicating 11.3% growth from the figure reported in the year-ago quarter.

The consensus estimate for Abercrombie & Fitch’s fiscal third-quarter earnings is pegged at $2.31 per share, implying 26.2% growth from the figure reported in the year-ago quarter. The consensus estimate for earnings has remained unchanged in the past 30 days. ANF has delivered an average earnings surprise of 28% in the trailing four quarters.

Chewy (CHWY - Free Report) has an Earnings ESP of +0.09% and currently sports a Zacks Rank of 1. CHWY is likely to register bottom and top-line growth when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.9 billion, indicating a 4.4% increase from the figure reported in the year-ago quarter.

The consensus estimate for CHWY’s fiscal third-quarter earnings is pegged at 23 cents a share, up 53.3% from the year-ago quarter. The consensus mark has remained unchanged in the past 30 days. CHWY has delivered an average earnings surprise of 50.9% in the trailing four quarters.

Home Depot (HD - Free Report) currently has an Earnings ESP of +2.64% and a Zacks Rank of 3. The company is expected to register top-line growth when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for HD’s quarterly revenues is pegged at $39.2 billion, which implies growth of 4% from the year-ago quarter’s figure.

The consensus estimate for Home Depot’s earnings has remained stable in the past 30 days at $3.64 per share. The consensus estimate for earnings implies a drop of 4.5% from the year-ago quarter’s figure. HD has delivered an average earnings surprise of 1.6%  in the trailing four quarters.

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