Ross Stores rallies after earnings topper, guidance boost
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Ross Stores (NASDAQ:ROST) traded higher in postmarket trading on Thursday after the off-price retailer beat estimates on both lines of its Q2 earnings report and set favorable profit guidance.
Comparable sales rose 5% year-over-year during Q2 to sail past the consensus expectation for a 1.0% gain. The strong growth came against a soft comparable from a year ago comp sales fell by 7%. Operating margin for the quarter was the same as last year at 11.3% of sales.
CEO outlook: "Despite the recent moderation in inflation, our low-to-moderate income customer continues to face persistently higher costs on necessities. As such, we believe it is prudent to continue to plan the business cautiously. However, given our improved second quarter performance, we are raising our second half sales and earnings outlook."
Ross Stores (ROST) ended the quarter with 2,061 stores vs. 1,980 a year ago. Merchandise inventory was $2.30B vs. $2.72B a year ago.
Looking ahead, Ross Stores (ROST) guided for comparable sales to increase 2% to 3% in Q3 vs. +1.0% consensus and be 1% to 2% higher in Q4. EPS for Q3 is projected to be $1.16 to $1.21 vs. $1.17 consensus, and Q4 EPS is projected to be $1.58 to $1.64 vs. $1.56 consensus.
Shares of Ross Stores (ROST) shot up 4.50% in postmarket trading on Thursday to push the YTD return back into positive territory.

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