Ross Stores rallies after comparable sales impress
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Ross Stores (ROST
+6.4%) jumped in early trading on Wednesday after topping consensus marks with its Q4 earnings report on the back of a 9% jump in comparable sales versus the 2019 mark. Investors are also eying the update from Ross Stores (NASDAQ:ROST) on new store growth.
CEO Barbara Rentler: "Given consumersâ increased focus on value and convenience, we have seen favorable sales trends in both our new and in-fill market stores. As a result, along with the large number of retail closures and bankruptcies over the last several years, we now believe that Ross Dress for Less can expand to about 2,900 locations, up from our prior target of 2,400, and that ddâs DISCOUNTS can eventually become a chain of approximately 700 stores, versus our previous projection of 600."
Morgan Stanley called the Q4 EPS beat impressive in light of the industry-wide supply chain and COVID-related headwinds facing the retailer. Analyst Kimberly Greenberger and team think those headwinds will fade as 2022 unfolds and sees upside to both ROST's revenue and margin guidance. It is noted that Ross Stores (ROST) traditionally guides cautiously.
The firm kept an Overweight rating on ROST and clipped its price target to $137.
Investors were cautious on Ross Stores (ROST) into the report with shares down more than 20% YTD.