Ross Stores, Inc. (ROST) surged after delivering a strong earnings beat and signaling steady demand across its off-price retail network.
Momentum in traffic, merchandising, and store experience is helping the retailer extend its growth streak into the new fiscal year.
Earnings Snapshot
On Tuesday, Ross Stores reported earnings per share of $2.00, beating the consensus estimate of $1.89. Revenue totaled $6.63 billion, beating the consensus estimate of $6.41 billion and increasing 12% year-over- year from $5.9 billion in the prior-year quarter.
Looking ahead, Ross Stores sees first-quarter GAAP earnings per share of $1.60 to $1.67, versus the consensus estimate of $1.62. Furthermore, Ross expects fiscal-year GAAP earnings per share of $7.02 to $7.36. The consensus estimate is $7.17.
Analyst Takeaways
- Telsey Advisory Group analyst Dana Telsey upgraded the stock from Market Perform to Outperform, raising the price forecast from $240 to $220.
- Guggenheim analyst Simeon Siegel maintained the Buy rating on the stock, raising the price forecast from $199 to $226.
Telsey Advisory Group: Telsey said Ross Stores built momentum in the second half of fiscal 2025, closing the year with a strong holiday-quarter earnings beat driven by better-than-expected sales and gross margin expansion.
Comparable sales more than doubled the high end of management’s guidance, supported by higher traffic and transactions, along with modest basket gains.
Strength was broad-based across departments and regions, with a sharper assortment and improved shopping experience boosting engagement.
Momentum has continued into early fiscal 2026, consistent with Ross’ typically conservative guidance. Telsey now expects FY26 EPS of $7.36, up from $7.21 and above prior consensus of $7.22, versus $6.61 last year, and sees FY27 EPS at $8.14 compared with the prior $7.90 consensus.
Guggenheim: Siegel said Ross Stores’ comparable sales growth was driven mainly by higher transactions and customer traffic. He said basket size rose modestly, while units per transaction were roughly flat.
Also, the analyst highlighted that average unit retail increased, helped by strength in the tariff-exposed home category.
He said management believes it may have room to push higher-priced goods or raise some retails.
Siegel said results were broad-based, with shoes and cosmetics leading and the Midwest and Mountain regions strong.
Siegel said the fourth quarter ended with solid momentum and spring started strong, supporting the guide.
ROST Price Action: Ross Stores shares are trading higher by 7.07% to $211.53 at last check Wednesday.
Photo via Shutterstock
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