As the temperature across a large portion of the U.S. turns from cold to colder, some stocks start to warm up and benefit from the brutal shift in weather.

Tractor Supply Company (TSCO): Last winter, in the company's first-quarter 2008 conference call, CEO Jim Wright said the following regarding last winter's weather: “We generated stronger-than-expected sales during the first quarter. Our team executed well at the store level and took advantage of the cold weather opportunity.”

He also said: “We were deliberate in our markdown strategy on winter-related merchandise, which produced a solid sell-through" He said the trend should continue through the cold weather.

Tractor Supply operates retail farm and ranch stores in the U.S. The company offers various products for the agricultural and rural lifestyles, including hardware, power equipment, trucks, towing products and footwear. Currently, it operates 834 stores in 44 states, with an average store size of 16,600 square feet.

For the third quarter of 2008, Tractor Supply earned 53 cents per share vs. 44 cents per share just a year ago, equating to a 20% change in net EPS. While the market is still waiting for Tractor Supply's fourth-quarter earnings and full-year 2008 numbers, Tractor Supply has enjoyed a 16.4% compounded annual growth rate from 2003 to 2007, as sales went from $1.5 billion to $2.7 billion during that time span. Net income grew from $56 million to $96 million, as earnings per share grew from $1.38 to $2.40 in the same time span.

Blair, a mid-sized investment bank, came out with cautious note regarding Tractor Supply that cited recent economic deflation, particularly in the retail consumer space, as a possible point of concern. Even so, in October, Tractor Supply forecasted earnings for the rest of 2008 to be $2.49 to $2.55, which was toward the lower end of Wall Street's estimates of $2.54 per share.

Columbia Sportswear (COLM): The Oregon-based retailer designs and sells outdoor apparel, including outerwear, sportswear and footwear. Columbia Sports has beaten Wall Street’s estimates in six out of the last seven quarters, and the stock sports a forward P/E of 12.43, PEG of 1.22 and yield of 1.4%. For a retailer, it sports a fairly healthy balance sheet, with profitability margins of 9.1% and operating margins of 12.2%. Unlike the debt-riddled Jones Apparel (JYN) and Liz Claiborne (LIZ), Columbia has $145 million dollars in cash ($4.30 per share), with zero debt, which means almost 10% of the company is in cash.

Timberland (TBL): When it’s cold outside, people buy more boots, and Timberland could be the sole beneficiary here. The company, which has negatively restated earnings estimates several times over the last few years, could see a relative bid to its equity price as the weather turns from cold to colder. It has a relatively clean balance sheet, with $63 million in cash ($1.10 per share) and zero debt, which means almost 10% of the company is in cash. With Nike’s (NKE) unsuccessful attempts to penetrate the boot market, Timberland, near its 52-week low, seems like a possible takeover candidate for Nike.

Avon Products (AVP): The winter can wreak particular havoc on one's face as the cold, the wind and overheated buildings suck the moisture from the air, affecting drying delicate tissue. A slightly unconventional name here, Avon owns Burt’s Bees, which caters directly to this sort of problem.

For a few more cold weather ideas, check out the Cold Weather Stocks portfolio on Stockpickr.

Posted on Jan. 22, 2009