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Can Ross Stores (ROST) Spring a Surprise in Q4 Earnings?
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Ross Stores, Inc. (ROST - Free Report) is scheduled to release fourth-quarter fiscal 2016 results on Feb 28. The big question facing investors is, whether this discount store chain will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company delivered a positive earnings surprise of 10.7%. In fact, in the trailing four quarters, Ross Stores has outperformed the Zacks Consensus Estimate by an average of nearly 5%. Further, a look at Ross Stores’ earnings estimates revisions shows that the Zacks Consensus Estimate for the fourth-quarter has been stable, while that for fiscal 2016 has witnessed an uptrend, over the last 30 days. Moreover, the current Zacks Consensus Estimate of 75 cents per share for the fiscal fourth quarter reflects a year-over-year increase of 13.6%. Also, analysts polled by Zacks expect revenues of $3.5 billion, up 6.3% from the year-ago quarter.
Notably, Ross Stores forms part of the Retail – Wholesale sector. Per the latest Earnings Preview, total earnings for the sector are expected to dip 1.2%, though revenues are projected to improve 4.7%.
Ross Stores has outperformed the Zacks categorized Retail – Discount Stores industry in the past one year. Evidently, its shares have rallied 25.5% over the past one year, compared with the industry’s growth of 9.6%.
Ross Stores has been gaining from the favorable response of value-focused customers to its extensive collection of brand bargains and solid cost controls. Further, we remain impressed with the company’s merchandise organization initiatives as well as its ability to run the business with leaner inventory levels. We believe that Ross Stores’ solid financial status, ongoing merchandise initiatives and consistent focus on store expansion bode well, as these factors have been driving the company for a while now.
However, challenges related to strong comparisons, amid macroeconomic uncertainty and a volatile retail landscape are expected to hurt fourth-quarter results. Consequently, the company had slightly tweaked its earnings outlook for the fourth quarter. Nonetheless, management retained its comparable store sales view for the fourth quarter. Moreover, given the strength of its growth drivers and solid performance through the first three quarters of the fiscal, the company raised its earnings projections for fiscal 2016. So, let’s wait and see if Ross Stores can maintain its robust momentum this time around too.
Earnings Whispers
Our proven model does not conclusively show that Ross Stores is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Ross Stores is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Ross Stores’ Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
NIKE, Inc. (NKE - Free Report) , expected to release earnings on Mar 28, currently has an Earnings ESP of +0.85% and a Zacks Rank #3.
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Can Ross Stores (ROST) Spring a Surprise in Q4 Earnings?
Ross Stores, Inc. (ROST - Free Report) is scheduled to release fourth-quarter fiscal 2016 results on Feb 28. The big question facing investors is, whether this discount store chain will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company delivered a positive earnings surprise of 10.7%. In fact, in the trailing four quarters, Ross Stores has outperformed the Zacks Consensus Estimate by an average of nearly 5%. Further, a look at Ross Stores’ earnings estimates revisions shows that the Zacks Consensus Estimate for the fourth-quarter has been stable, while that for fiscal 2016 has witnessed an uptrend, over the last 30 days. Moreover, the current Zacks Consensus Estimate of 75 cents per share for the fiscal fourth quarter reflects a year-over-year increase of 13.6%. Also, analysts polled by Zacks expect revenues of $3.5 billion, up 6.3% from the year-ago quarter.
Notably, Ross Stores forms part of the Retail – Wholesale sector. Per the latest Earnings Preview, total earnings for the sector are expected to dip 1.2%, though revenues are projected to improve 4.7%.
Ross Stores, Inc. Price and EPS Surprise
Ross Stores, Inc. Price and EPS Surprise | Ross Stores, Inc. Quote
Factors Influencing this Quarter
Ross Stores has outperformed the Zacks categorized Retail – Discount Stores industry in the past one year. Evidently, its shares have rallied 25.5% over the past one year, compared with the industry’s growth of 9.6%.
Ross Stores has been gaining from the favorable response of value-focused customers to its extensive collection of brand bargains and solid cost controls. Further, we remain impressed with the company’s merchandise organization initiatives as well as its ability to run the business with leaner inventory levels. We believe that Ross Stores’ solid financial status, ongoing merchandise initiatives and consistent focus on store expansion bode well, as these factors have been driving the company for a while now.
However, challenges related to strong comparisons, amid macroeconomic uncertainty and a volatile retail landscape are expected to hurt fourth-quarter results. Consequently, the company had slightly tweaked its earnings outlook for the fourth quarter. Nonetheless, management retained its comparable store sales view for the fourth quarter. Moreover, given the strength of its growth drivers and solid performance through the first three quarters of the fiscal, the company raised its earnings projections for fiscal 2016. So, let’s wait and see if Ross Stores can maintain its robust momentum this time around too.
Earnings Whispers
Our proven model does not conclusively show that Ross Stores is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Earnings ESP for Ross Stores is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Ross Stores’ Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Burlington Stores, Inc. (BURL - Free Report) , slated to release earnings on Mar 2, currently has an Earnings ESP of +1.18% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 2, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
NIKE, Inc. (NKE - Free Report) , expected to release earnings on Mar 28, currently has an Earnings ESP of +0.85% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>