Ross Stores stock rips higher on big earnings beat, bullish guide
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Ross Stores (NASDAQ:ROST) stock roared to a double-digit gain in after hours trading on Thursday after posting a stronger than expected Q3 report and raised full-year forecasts.
The California-based off-price retailer reported $1.00 in earnings per share for the third quarter alongside $4.6B in sales. Analysts had anticipated $0.81 and $4.37B, respectively. Additionally, comparable store sales fell 3% from the prior year quarter, far bette than the 8% decline expected by analysts.
âThird quarter results were above our expectations as we delivered stronger values throughout our stores,â CEO Barbara Rentler commented. âOperating margin for the period was 9.8% versus 11.4% last year, reflecting the deleveraging effect from the comparable sales decline as well as pressure from higher markdowns and unfavorable timing of packaway-related costs.â
Moving forward, Rentler remained very optimistic on the holiday sales season ahead. She noted that while promotional activity and inflation issues will linger into the quarter, the company is facing its âeasiest sales and earnings comparisons in the fourth quarterâ and feels confident in raising guidance.
The retailer now expects Q4 same store sales to be flat to down 2% and earnings per share to be in the range of $1.13 to $1.26. As such, Reniter raised full-year forecasts to a range of $4.21 to $4.34, up from a prior $3.84 to $4.12. Analysts had expected $4.02. 
Shares rocketed 12.34% higher shortly after the print.
âThere remains a high level of uncertainty in todayâs macroeconomic and geopolitical environment that continues to negatively impact consumer sentiment and demand,â Rentler concluded. âHowever, we remain confident in the off-price business model, which offers both value and convenience. Given consumersâ heightened focus on both of these attributes, it should bode well for our ability to expand our market share and profitability in the future.â
Dig into the details of the results.