Ross Stores beats Street and lifts outlook as customers shop for bargains
Ross Stores reported better-than-expected second-quarter earnings and sales as shoppers sought out its stores for bargains.
The off-pricer announced its results a day after two other discounters, Walmart and TJX Cos., also reported strong second quarters that came in above estimates.
Ross, which is which is on track to open 100 new stores this year, earned $446 million, or $1.32 a share, in the quarter ended July 30, up from $385 million, or $1.11 a share, in the year-ago period. Analysts has expected earnings of $1.16 per share.
Sales rose to $4.9 billion, from $4.6 billion a year ago, topping estimates of $4.8 billion. Same-store sales rose 5%.
“Along with easing inflationary pressures, customers responded well to our improved value offerings throughout our stores,” stated CEO Barbara Rentler.
Based on its first half results and second half guidance, Ross said it expects earnings for the full year to be in the range of $5.15 to $5.26 compared to its previous outlook of $4.77 to $4.99. Same-store sales are expected to rise 2% to 3% versus previous expectations for them to be relatively flat.
Rentler added that despite the recent moderation in inflation, the company’s low-to-moderate income customer continues to face persistently higher costs on necessities.
“Moving forward, we remain focused on delivering the most compelling bargains possible while also carefully managing our expenses and inventory to maximize our potential for both sales and earnings growth,” Rentler said. “Longer-term, we believe the rigorous execution of our off-price business model will allow us to consistently deliver solid results.”
As previously announced, Ross expects to buy back $950 million of common stock this year under its two-year $1.9 billion repurchase program that extends through fiscal 2023.
Headquartered in Dublin, Calif,. Ross had fiscal 2022 revenues of $18.7 billion. At the end of the second quarter, the company operated 1,722 Ross stores in 41 states, the District of Columbia, and Guam, along with 339 dd’s Discounts stores in 22 states.