Shares of Tractor Supply Co. traded sharply lower on Thursday, a day after the farm equipment retailer said it swung to a loss in the first quarter and cut its outlook for the year.
Tractor Supply shares fell $2.27, or 6.1 percent, to close at $35.22.
Late Wednesday, the Brentwood, Tenn., company said it lost 3 cents per share in the first quarter, down from a profit of 12 cents per share a year earlier. Tractor Supply also trimmed its sales outlook for the year and predicted earnings at the low end of its guidance.
Several analysts cut their forecasts after the results. In a note to investors, Wachovia Capital Markets analyst Peter Benedict said although Tractor Supply has a record of long-term growth, its exposure to expensive, discretionary products makes it risky in the near term. The company primarily sells equipment and supplies to recreational farmers and ranchers.
Benedict was upbeat, however, on the company's plan to cut costs and inventory, predicting the moves could show results in the coming quarters.
Benedict, who rates the company "Market Perform," cut his 2008 outlook to $2.53 per share from $2.60. Analysts polled by Thomson Financial expect full-year earnings of $2.58 per share.
Oppenheimer analyst Vivian Ma echoed those sentiments, saying the company has substantial exposure to uncertain markets, such as the Southern U.S. housing market.
In addition, Ma said the summer market for outdoor power equipment remains uncertain, especially as the broader economy weakens. On Thursday, the Commerce Department said orders on durable goods fell for the third straight month in March.
Ma, who rates the company "Perform," cut her full-year outlook to $2.52 per share from $2.64. Shares of Tractor Supply have traded between $28.01 and $56.93 in the last 52 weeks.
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