Why Ross Stores Is Among the Best Retailers Reporting This Quarter

By Chris Lange Updated Jan 12, 9:00AM EST · Published Aug 18, 10:00AM EDT

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Why Ross Stores Is Among the Best Retailers Reporting This Quarter — © Thinkstock

Ross Stores Inc. (NASDAQ: ROST) released its most recent earnings report after the markets closed on Thursday. In a rare move, this company has seemingly bucked the sliding retail trend and is easily one of the best reporting retailers this quarter.

The company said that it had $0.82 in earnings per share (EPS) and $3.43 billion in revenue, which compared with consensus estimates of $0.76 in EPS and revenue of $3.37 billion. In the second quarter of last year, the company posted EPS of $0.71 and $3.18 billion in revenue.

Comparable sales grew 4% in this quarter, on top of 4% growth last year.

For the third quarter, management forecasts a same-store sales gain of 1% to 2%, on top of a 7% increase in the prior year. The company also projects EPS to be in the range of $0.64 to $0.67, up from $0.62 in last year’s third quarter. Consensus estimates call for $0.91 in EPS and $3.91 billion in revenue for the current quarter.

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On the books, Ross Stores cash, cash equivalents and short-term investments totaled $1.15 billion at the end of the quarter, up from with $928.9 million in the same period of last year.

Barbara Rentler, CEO of Ross, commented:

We are pleased with the better-than-expected growth we delivered in both sales and earnings in the second quarter, especially given our strong multi-year comparisons and today’s volatile retail climate. Operating margin of 14.9% outperformed our projections, mainly due to a combination of higher merchandise margin and leverage on our above-plan sales gains.

Shares of Ross were last seen up over 10% at $59.00 on Friday, with a consensus analyst price target of $71.19 and a 52-week range of $52.85 to $69.81.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.