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Ross Stores, Inc. (ROST), headquartered in Dublin, California, is an off-price retailer offering a wide range of apparel and home merchandise across the U.S. Known for delivering brand-name and designer products at substantial discounts, Ross Stores operates popular chains such as Ross Dress for Less and dd's DISCOUNTS, catering to value-conscious shoppers nationwide. With a market cap of $48.1 billion, Ross Stores is set to release its Q3 earnings report on Thursday, Nov. 21.
Ahead of the event, analysts expect ROST to report a profit of $1.41 per share, up 6% from $1.33 in the year-ago quarter. The company has consistently beaten Wall Street's earnings estimates in the past four quarters.
Ross Stores' adjusted earnings of $1.59 per share for the last quarter surpassed the consensus estimate by 6.7%. The company’s Q2 beat was driven by solid value offerings that boosted customer traffic and basket sizes, leading to higher sales and earnings.
For fiscal 2024, analysts expect ROST to report EPS of $6.20, up 11.5% from $5.56 in fiscal 2023.
ROST stock is up 3.5% on a YTD, underperforming the broader S&P 500 Index's ($SPX) 22.1% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 12.6% gain over the same time frame.
Ross Stores' underperformance can be attributed to the company's heavy reliance on physical retail locations, which have been negatively impacted by the shift toward online shopping. Additionally, increased competition from other discount retailers has put pressure on Ross Stores' margins and market share.
However, shares of Ross Stores gained 1.8% after posting Q2 earnings on Aug. 23. The retailer posted total sales of $5.3 billion, up 7% year-over-year and a 4% boost in comparable store sales, reflecting greater customer engagement and spending.
The consensus opinion on ROST stock is bullish, with an overall “Strong Buy” rating. Of 21 analysts covering the stock, 18 advise a “Strong Buy” rating, and three suggest a “Hold.”
ROST’s average analyst price target is $176.10, suggesting a potential upside of 23% from the current levels.
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 here.
