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Here's What Makes Ross Stores (ROST) a Good Investment Now
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Ross Stores Inc. (ROST - Free Report) has been a lucrative investment option due to its business momentum, which is reflected in its strong quarterly performance. The company reported the second consecutive quarter of top and bottom-line beat in second-quarter fiscal 2023.
ROST has been gaining from positive consumer responses to its merchandise. The company has been witnessing positive trends at its dd’s DISCOUNTS chain, driven by better merchandise and moderating inflation. However, low to moderate-income customers continue to reel under higher costs.
The company’s off-price model offers a strong value proposition and micro-merchandising that drive better product allocation and margins. Overall, gains at the core business demonstrated consumers' continued focus on value and ROST’s ability to deliver value bargains to customers.
Driven by the continued business momentum, management raised its second-half sales and earnings guidance. Comparable store sales for the third and fourth quarters of fiscal 2023 are expected to be up 2-3% and 1-2% year over year, respectively. Total sales are anticipated to grow 4-6% year over year.
For the fiscal third quarter, earnings per share are envisioned to be $1.16-$1.21, suggesting a rise from the last-year quarter’s reported figure of $1.00. The operating margin for the fiscal third quarter is expected to be 10.3-10.5%, whereas it reported 9.8% in the last-year quarter, driven by gains from lower ocean and domestic freight costs, which more than offset increased incentive compensation and store wages.
For fiscal 2023, comparable store sales are anticipated to be up 2-3% year over year. Earnings are forecast to be $5.15-$5.26, whereas it reported $4.38 in the prior year.
The positive sentiment from the strong business momentum and an upbeat view is well-reflected in the company’s share performance. In the past year, the Zacks Rank #2 (Buy) stock has rallied 32.3% compared with the industry’s growth of 3.4%. The stock also outpaced the sector’s and the S&P 500’s growth of 7.9% and 14%, respectively, in the same period.
Additionally, the Zacks Consensus Estimate for Ross Stores’ current financial-year sales and EPS suggests growth of 8.1% and 19.4%, respectively, from the year-ago reported numbers. With a long-term earnings growth rate of 11.6% and a VGM Score of A, Ross Stores has ample scope to attain new highs.
Image Source: Zacks Investment Research
Store Growth Ambition
ROST has been consistent with the execution of its store expansion plans over the years. The company’s store expansion efforts are focused on continually increasing penetration in the existing and new markets. In second-quarter fiscal 2023, the company opened 18 Ross and nine dd's DISCOUNTS stores.
For the fiscal third quarter, the company intends to open 51 locations, including 43 Ross and eight dd’s DISCOUNTS locations. In fiscal 2023, it expects to open 100 stores, including 75 Ross and 25 dd’s DISCOUNTS. These openings do not include the plans to close or relocate 10 existing stores in fiscal 2023.
The company has ambitious goals, aiming to reach at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time. By expanding its store network, ROST strengthens brand visibility, captures new customer segments and unlocks potential sales growth.
The expansion strategy, combined with its strong brand reputation and off-price retail model, positions Ross Stores for success in the dynamic retail landscape. The strategic store openings fortify its competitiveness.
No doubt, Ross Stores has struck a chord with bargain hunters in search of quality and brand-name products at significantly discounted prices.
3 Stocks Looking Red Hot
Here we have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Urban Outfitters (URBN - Free Report) .
Abercrombie, a specialty retailer of premium, high-quality casual apparel for men, women, and kids, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 724.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie’s current financial-year sales suggests growth of 10.4%, from the year-ago reported number. The consensus mark for EPS is pegged at $4.36, suggesting significant growth of 1,644% from the year-ago quarter’s EPS of 25 cents.
American Eagle, which operates as a specialty retailer of casual apparel, accessories and footwear for men and women, currently flaunts a Zacks Rank #1. The expected EPS growth rate for three to five years is 15.3%.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales and earnings indicates growth of 1.3% and 24.7%, respectively, from the year-ago reported numbers. AEO has a trailing four-quarter earnings surprise of 4.7%, on average.
Urban Outfitters, a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products, currently sports a Zacks Rank #1. The expected EPS growth rate for three to five years is 23.8%.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings implies growth of 9% and 84.6%, respectively, from the year-ago reported numbers. URBN has a trailing four-quarter earnings surprise of 19.2%, on average.
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Here's What Makes Ross Stores (ROST) a Good Investment Now
Ross Stores Inc. (ROST - Free Report) has been a lucrative investment option due to its business momentum, which is reflected in its strong quarterly performance. The company reported the second consecutive quarter of top and bottom-line beat in second-quarter fiscal 2023.
ROST has been gaining from positive consumer responses to its merchandise. The company has been witnessing positive trends at its dd’s DISCOUNTS chain, driven by better merchandise and moderating inflation. However, low to moderate-income customers continue to reel under higher costs.
The company’s off-price model offers a strong value proposition and micro-merchandising that drive better product allocation and margins. Overall, gains at the core business demonstrated consumers' continued focus on value and ROST’s ability to deliver value bargains to customers.
Driven by the continued business momentum, management raised its second-half sales and earnings guidance. Comparable store sales for the third and fourth quarters of fiscal 2023 are expected to be up 2-3% and 1-2% year over year, respectively. Total sales are anticipated to grow 4-6% year over year.
For the fiscal third quarter, earnings per share are envisioned to be $1.16-$1.21, suggesting a rise from the last-year quarter’s reported figure of $1.00. The operating margin for the fiscal third quarter is expected to be 10.3-10.5%, whereas it reported 9.8% in the last-year quarter, driven by gains from lower ocean and domestic freight costs, which more than offset increased incentive compensation and store wages.
For fiscal 2023, comparable store sales are anticipated to be up 2-3% year over year. Earnings are forecast to be $5.15-$5.26, whereas it reported $4.38 in the prior year.
The positive sentiment from the strong business momentum and an upbeat view is well-reflected in the company’s share performance. In the past year, the Zacks Rank #2 (Buy) stock has rallied 32.3% compared with the industry’s growth of 3.4%. The stock also outpaced the sector’s and the S&P 500’s growth of 7.9% and 14%, respectively, in the same period.
Additionally, the Zacks Consensus Estimate for Ross Stores’ current financial-year sales and EPS suggests growth of 8.1% and 19.4%, respectively, from the year-ago reported numbers. With a long-term earnings growth rate of 11.6% and a VGM Score of A, Ross Stores has ample scope to attain new highs.
Image Source: Zacks Investment Research
Store Growth Ambition
ROST has been consistent with the execution of its store expansion plans over the years. The company’s store expansion efforts are focused on continually increasing penetration in the existing and new markets. In second-quarter fiscal 2023, the company opened 18 Ross and nine dd's DISCOUNTS stores.
For the fiscal third quarter, the company intends to open 51 locations, including 43 Ross and eight dd’s DISCOUNTS locations. In fiscal 2023, it expects to open 100 stores, including 75 Ross and 25 dd’s DISCOUNTS. These openings do not include the plans to close or relocate 10 existing stores in fiscal 2023.
The company has ambitious goals, aiming to reach at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time. By expanding its store network, ROST strengthens brand visibility, captures new customer segments and unlocks potential sales growth.
The expansion strategy, combined with its strong brand reputation and off-price retail model, positions Ross Stores for success in the dynamic retail landscape. The strategic store openings fortify its competitiveness.
No doubt, Ross Stores has struck a chord with bargain hunters in search of quality and brand-name products at significantly discounted prices.
3 Stocks Looking Red Hot
Here we have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Urban Outfitters (URBN - Free Report) .
Abercrombie, a specialty retailer of premium, high-quality casual apparel for men, women, and kids, currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 724.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie’s current financial-year sales suggests growth of 10.4%, from the year-ago reported number. The consensus mark for EPS is pegged at $4.36, suggesting significant growth of 1,644% from the year-ago quarter’s EPS of 25 cents.
American Eagle, which operates as a specialty retailer of casual apparel, accessories and footwear for men and women, currently flaunts a Zacks Rank #1. The expected EPS growth rate for three to five years is 15.3%.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales and earnings indicates growth of 1.3% and 24.7%, respectively, from the year-ago reported numbers. AEO has a trailing four-quarter earnings surprise of 4.7%, on average.
Urban Outfitters, a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gifts products, currently sports a Zacks Rank #1. The expected EPS growth rate for three to five years is 23.8%.
The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings implies growth of 9% and 84.6%, respectively, from the year-ago reported numbers. URBN has a trailing four-quarter earnings surprise of 19.2%, on average.