Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Ross Stores stock jumps on earnings beat, raised profit outlook

Published 2024-05-23, 04:16 p/m
© Reuters.
ROST
-

Ross Stores (NASDAQ: NASDAQ:ROST) reported first quarter with earnings per share (EPS) of $1.46, beating the analyst consensus of $1.35.

The discount retailer also saw its revenue climb to $4.86 billion, a slight beat over the $4.83 billion consensus estimate and an 8% increase from $4.5 billion in the same quarter last year. Comparable store sales experienced a healthy 3% uptick.

The company's shares jumped more than 8% in premarket trading Friday.

“We are impressed by Ross Stores ability to out comp MarMaxx for a 2nd consecutive quarter, while also flowing through a 37% incremental margin on same-store sales +3%," TD (TSX:TD) Cowen analysts commented on the results. 

"Management has stores improving from a sales productivity (better merchandising and value) and efficiency standpoint (SG&A per store declined 1% y/y). Home, beauty, footwear remain SSS drivers, while we look for apparel to re-accelerate.”

Chief Executive Officer Barbara Rentler attributed the better-than-expected earnings to lower expenses, noting that the company navigated macroeconomic challenges that have been impacting customer spending.

Looking ahead, Ross Stores anticipates a 2% to 3% rise in comparable store sales for the second quarter, on top of a 5% increase in the prior year. The company projects second-quarter EPS to range between $1.43 and $1.49, an improvement from $1.32 reported in the same period last year. This forecast aligns closely with the consensus estimate of $1.45.

For the full fiscal year 2025, Ross Stores expects EPS to be between $5.79 and $5.98, with the midpoint of $5.885 slightly below the analyst consensus of $5.92.

The company's confidence is further evidenced by its share repurchase program, with $262 million spent on buybacks in the first quarter as part of a larger $2.1 billion authorization. Ross Stores remains on course to repurchase $1.05 billion in common stock during fiscal 2024.

Rentler stressed the importance of offering customers the best value in a challenging economic climate and committed to tight inventory and expense management to fuel sales and earnings growth.

Despite the ongoing uncertainty and inflationary pressures, Ross Stores' guidance reflects an optimistic stance for the remainder of the fiscal year.

In her remarks, Rentler noted, "As a reminder, fiscal 2023 earnings per share included a benefit of approximately $0.20 from the 53rd week." 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.