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Ross Stores Reaches Q2 Expansion Target, Opens 28 Stores

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Off-price retailer of apparel and home accessories, Ross Stores Inc. (ROST - Free Report) is leaving no loose ends in its efforts to retain investor faith. The company has time and again showcased its ability to deliver on targets. That said, Ross Stores has completed its target of inaugurating 28 new stores in second-quarter fiscal 2017, with the opening of 21 Ross Dress for Less (“Ross”) and seven dd’s DISCOUNTS outlets.

These store openings that happened in June and so far in July marked the company’s expansion in 15 different states, including both new and existing markets. In this set of store openings, the company opened Ross outlets in the newest Midwest market, while also expanding presence in the existing California, Texas and Florida markets. Further, the company opened its 200th dd’s DISCOUNTS store in June and also expanded in the newest Pennsylvania market.

Notably, these store openings represent a significant progress on its plans to open 90 stores in fiscal 2017, including 70 Ross and 20 dd’s DISCOUNTS outlets. As a first step toward achieving this goal, the company had opened 28 new stores in first-quarter fiscal 2017, including 23 Ross Dress for Less and five dd’s DISCOUNTS stores. With the recent store openings, the company has achieved more than 60% of store expansion plans for the current fiscal.

Including the aforementioned store openings, Ross Stores operated 1,384 Ross Dress for Less stores across 37 states, the District of Columbia and Guam as well as 205 dd’s DISCOUNTS outlets across 16 states as of Jul 17, 2017.

Going forward, the company remains optimistic about expansion plans and views immense opportunity to grow in new as well as existing markets. Consequently, the company reiterated long-term goal of expanding store count to 2,500, comprising 2,000 Ross and 500 dd’s DISCOUNTS stores.

We remain confident of the company’s growth potential and its ability to successfully attain long-term store growth target. Additionally, we believe the company is underpenetrated in the 37 states it serves and holds promise to substantially expand store base in these markets.

Ross Stores has outperformed the Zacks categorized Retail – Discount Stores industry in the past one year. Though this Zacks Rank #2 (Buy) stock has dropped 7.5%, the decline is narrower than the industry’s fall of 15.1%.



Stocks to Consider

Some better-ranked stocks in the Discount Stores space are Burlington Stores Inc. (BURL - Free Report) , Target Corp. (TGT - Free Report) and Dollar General Corp. (DG - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores’ long-term EPS growth rate of 15.9% and a share price growth of 7.1% in the last six months help it to stand strong in the industry. Moreover, the company flaunts a superb earnings surprise history.

Target has a long-term EPS growth rate of 5.4%. Moreover, the stock has seen positive estimate revisions in the last seven days and has to its credit an average positive surprise of 16.5% in the trailing four quarters.

Dollar General, with long-term EPS growth rate of 10.6%, has grown 4.1% in the last three months.

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