Ross Stores Prepares for Q3 Earnings: Analysts Predict Solid Growth
Upcoming Earnings Report Raises Expectations
Ross Stores, Inc. (ROST), based in Dublin, California, is a well-known off-price retailer that provides a diverse range of apparel and home goods across the United States. The company is recognized for offering brand-name and designer items at significant discounts, operating popular chains like Ross Dress for Less and dd’s DISCOUNTS. With a market cap of $48.1 billion, Ross Stores is scheduled to announce its Q3 earnings report on Thursday, Nov. 21.
Promising Profit Expectations
Before the earnings release, analysts predict that ROST will report a profit of $1.41 per share, representing a 6% increase from $1.33 during the same period last year. Historically, the company has outperformed Wall Street’s earnings estimates in each of the last four quarters.
Recent Economic Successes
Last quarter, Ross Stores reported adjusted earnings of $1.59 per share, exceeding the consensus estimate by 6.7%. This strong performance was attributed to appealing value offerings that increased customer traffic and purchase sizes, ultimately boosting sales and earnings.
Fiscal Projections Look Positive
For the fiscal year 2024, analysts anticipate ROST will achieve earnings per share (EPS) of $6.20, which is an 11.5% increase compared to $5.56 in fiscal 2023.
Market Position and Challenges
As of now, ROST stock is up 3.5% year-to-date, which falls short compared to the broader S&P 500 Index’s ($SPX) 22.1% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.6% gain. The company’s challenges stem from its heavy reliance on physical stores, which have been adversely affected by a growing trend toward online shopping. This shift, combined with increased competition from other discount retailers, has pressured both Ross Stores’ profit margins and overall market share.
A Glimpse at Recent Performance
Despite these challenges, Ross Stores’ shares rose by 1.8% following the Q2 earnings release on Aug. 23. For that quarter, the retailer achieved total sales of $5.3 billion, up 7% year-over-year, alongside a 4% increase in comparable store sales, highlighting improved customer engagement and spending.
Analysts Remain Optimistic
The consensus on ROST stock is highly positive, reflected in an overall “Strong Buy” rating. Out of 21 analysts monitoring the stock, 18 recommend a “Strong Buy,” while three suggest a “Hold.”
ROST’s average price target is set at $176.10, indicating a potential upside of 23% from current levels.
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On the date of publication,
Rashmi Kumari
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy
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