By Emily Dattilo
Shares of Ross Stores were trading sharply higher Friday after the discount retailer easily beat quarterly estimates and lifted guidance.
Late Thursday, Ross posted earnings per share of $1.46 for its fiscal first quarter, beating Wall Street's call for $1.35, according to FactSet. Sales of $4.86 billion topped the consensus call for $4.83 billion. Same-store sales ticked 3% higher.
Ross stock was up 6.8% to $140.80 in premarket trading Friday, while futures tracking the S&P 500 edged 0.3% higher.
"Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers' discretionary spending," CEO Barbara Rentler said in the earnings release. "Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan."
For its fiscal second quarter, the company expects same-store sales to rise 2% to 3% and is calling for earnings per share of $1.43 to $1.49.
For fiscal 2024, Ross reiterated its same-store sales guidance of 2% to 3% growth but boosted its earnings forecast range to $5.79 to $5.98 per share from a prior call for $5.64 to $5.89 per share.
TD Cowen analysts led by John Kernan weighed in on the report, noting that the company "has historically issued conservative guidance." The team lifted their price target on the stock to $176 from $173, raised earnings estimates, and maintained a Buy rating.
Guggenheim analysts Robert Drbul and Arian Razai also chimed in, boosting their price target to $170 from $165 and reiterating a Buy rating on the stock. "While we are mindful of macro uncertainties, we believe ROST will sustain its sales momentum this year and into 2025," they wrote Thursday.
Jefferies analysts led by Corey Tarlowe, who rate shares at Hold with a price target of $147, acknowledged the strong quarter but still favor discount retailer peers TJX, the parent company of TJ Maxx and Home Goods, and Burlington Stores.
"We prefer TJX (Buy, $125 PT), given its international growth opportunity, broader customer demo, and more diversified category exposure," the team wrote Friday. "We also continue to favor BURL (Buy, $260 PT) for its growth and margin opportunities."
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 24, 2024 09:02 ET (13:02 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments