Ross Stores Boosts Earnings Guidance
August 18 2016 - 6:30PM
Dow Jones News
Ross Stores Inc. posted stronger-than-expected results for its
latest quarter, defying mounting concerns for the wider retail
sector, as same-store sales eclipsed company forecasts.
Ross posted a 4% climb in same-store sales, well above the 1% to
2% range predicted by the chain and the 2.1% climb analysts on
FactSet had expected.
The stronger quarter led the discount retailer to raise its
annual earning guidance to a range of $2.69 to $2.75 a share, up
from a previous forecast of $2.63 to $2.72.
Shares of Ross Stores, which have climbed 12% over the past
year, rose 2.8%, to $64.65, after hours.
For the current quarter, Ross projected same-store sales would
climb between 1% and 2% with earnings on a per-share basis in the
range of 52 cents and 55 cents, while analysts surveyed by Thomson
Reuters estimated 57 cents. For the fiscal fourth quarter,
comparable sales are expected to climb between 1% and 2% with
earnings between 73 cents and 76 cents, while analysts expect
earnings toward the low end of the range.
Retailers have struggled to keep pace with the growing reliance
of consumers on online venues. While Amazon.com snatches market
share, outlets such as department store giant Macy's, which
recently announced plans to shutter about 15% of its stores, have
grappled with declining foot traffic.
Ross, however, appears to be among the companies bucking the
trend. Fellow discount retailer TJX Cos., the parent of T.J. Maxx
and other off-price chains, reported Tuesday a 4% sales increase at
existing stores while adjusted earnings per share were stronger
than expected.
For the second quarter ended in July, Ross Stores said its
profit grew to $281.9 million, or 71 cents per share, up from
$258.6 million, or 63 cents a share, a year earlier. The company
had foreseen earnings in the range of 64 cents to 67 cents, while
analysts expected the upper-limit of that range at 67 cents.
Sales rose 7.2%, to $3.18 billion, above the $3.13 billion
projected by analysts surveyed by Thomson Reuters.
Revenue recaptured momentum in this latest quarter. Sales had
grown over 7% on a year-over-year basis each quarter dating to the
July period in 2015 until slowing to 5.1% growth in the prior
quarter.
During the second quarter and first six months of fiscal 2016,
Ross repurchased 3.1 million and 6.2 million shares respectively.
The company plans to buy back a total of $700 million in common
stock during fiscal 2016 to complete a two-year $1.4 billion
authorization.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
August 18, 2016 18:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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