By Shares of Ross Stores Inc. (ROST) surged more than 4% in the after-hours session on Thursday, following the company’s impressive quarterly earnings report. The discount retailer exceeded expectations and also revised its guidance for the year.
Strong Financial Performance
Ross earned $447 million, or $1.33 per share, in the third quarter, compared to $342 million, or $1 per share, in the same period last year. The company’s sales rose to $4.9 billion from $4.6 billion a year ago. Additionally, Ross experienced a 5% increase in comparable-store sales.
These remarkable results surpassed analysts’ predictions. According to FactSet, the consensus estimate was adjusted earnings of $1.22 per share on sales of $4.84 billion for the quarter. Same-store sales were projected to increase by 3%.
Positive Customer Response
Chief Executive Barbara Rentler expressed her satisfaction with the quarter’s performance, noting that customers responded favorably to the exceptional value offered by Ross Stores. She credited this positive response for the company’s impressive sales and earnings results.
Facing Economic Challenges
Despite the success, Rentler acknowledged the uncertainties that Ross continues to face, including macroeconomic volatility, persistent inflation, and recent geopolitical tensions. However, she remains confident in the resilience of the off-price sector and Ross’s ability to thrive within it.
Raised Guidance
While maintaining its fourth-quarter earnings per share (EPS) guidance at a range of $1.56 to $1.62, Ross Stores anticipates a year-end EPS between $5.30 and $5.36. This revised forecast considers the company’s performance thus far and an extra week in the fiscal year.
Promising Future Prospects
Rentler concluded on an optimistic note, emphasizing that Ross’s business model provides shoppers with both value and convenience. She believes that consumers’ increased focus on these factors will continue to benefit the company in the foreseeable future.
In summary, Ross Stores Inc. reported strong financial results in the third quarter, surpassing expectations. Despite ongoing economic challenges, the company remains confident in its ability to succeed in the off-price sector. With a revised guidance reflecting positive performance and a promising business model, Ross Stores looks forward to a bright future.
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