Ross Stores topped earnings expectations and raised fiscal-year guidance, sending the stock surging in after-hour trading Thursday.
The off-price retailer reported adjusted earnings of $1.59 a share, while revenue jumped 7% to $5.3 billion for the quarter ended Aug. 3. Analysts polled by FactSet had projected $1.50 in earnings on $5.25 billion in revenue.
Same-store sales rose by 4% this quarter compared with a year ago, coming in ahead of calls for a 2.9% increase.
The company also raised guidance for the fiscal year ending February. Earnings will range between $6 and $6.13 per share, higher than prior guidance calling for $5.79 to $5.98 a share. The Street had penciled in full-year earnings of $6.01 a share, according to FactSet.
Ross' bottom line is benefiting from the surge in sales, as well as ongoing cost reductions, the company said.
Ross stock was gaining 6% in the after-hour session. Shares have gained 10% this year.
Off-price retailers have been performing exceedingly well over the past few years, gaining market share as inflation-weary consumers look for new ways to stretch their budgets further. Competitor TJX Cos. also had a strong second-quarter, with sales rising 6% from the prior year.
"Delivering the great values that our off-price customers have come to expect from us is more important than ever, especially given the continued pressures they face from the high costs on necessities," said Ross CEO Barbara Rentler. "Thus, to maximize our prospects for ongoing market share gains, we will stay laser-focused on providing our shoppers the most quality branded bargains available in the marketplace."
