TSCO - preannounced positive earnings guidance on Wednesday for 2Q09. The Company suggested its earnings per share (EPS) would come in at $1.48-$1.50 for the quarter versus consensus of $1.28.
In its press release TSCO CEO, Jim Wright, mentioned that gross margins expanded during the quarter net of advertising because of a program to discontinue TV advertising and focus on more direct marketing campaigns. He also said TSCO was able to increase comparable store transactions by 460 basis points during the quarter.
That transaction increase came as no surprise to myself nor my inlaws, who did some field research for me, on the ground in Texas and Indy. TSCO makes a good ball cap too!
TSCO's stock price has risen 27.60% since the original posting compared to the S&P 500 increase of 1.21%. The Company still appears interesting based on its forecasted and steady growth rate, my store checks on feed sales, and cash generation possibilities. However, I am a bit concerned regarding the current lower margin of safety, and as a result TSCO is being removed from the Long Interest List.
-2outof4
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