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Can Ross Stores (ROST) Retain Positive Earnings Trend in Q3?
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Ross Stores, Inc. (ROST - Free Report) is slated to report third-quarter fiscal 2018 results on Nov 20, before the opening bell. In the last reported quarter, the company recorded a positive earnings surprise of nearly 3%.
In the trailing four quarters, Ross Stores outperformed the Zacks Consensus Estimate by an average of 5.1%, with a positive surprise in each quarter. Let’s see how things are shaping up before this announcement.
Investors are keen to know whether this California-based company will be able to continue with its streak of positive earnings and revenue surprises. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 89 cents, reflecting year-over-year growth of 23.6%. Notably, earnings estimates for the fiscal third quarter remained unchanged over the last 30 days. The Zacks Consensus Estimate for revenues is pegged at $3.55 billion, reflecting growth of 6.8% from the year-ago quarter.
Ross Stores has rallied 57.9% in the past year compared with 42.4% growth recorded by the industry. Further, the stock has improved 5.4% in the past month, reflecting a positive sentiment ahead of earnings.
Factors at Play
Ross Stores continued with its upbeat performance, recording positive earnings and sales surprises for the last nine quarters. The company is gaining from continually delivering broad assortments of compelling bargains to value-focused customers.
Further, the company’s solid endeavors, including better price management, merchandising initiatives, cost containment and store-expansion plans position it for growth. Ross Stores’ off-price model renders strong value proposition and micro-merchandising that drive better product allocation and margins. This helped the company to deliver solid top- and bottom-line trends.
We observe that the company's total sales increased 8.9% in second-quarter fiscal 2018, with comparable store sales (comps) growth of 5%. Historically, sales increased 8.5% in first-quarter fiscal 2018. Moreover, it increased 7%, 7.9%, 7.8% and 16% in the first, second, third, and fourth quarters of fiscal 2017, respectively. Moreover, comps increased 3% in first-quarter fiscal 2018. Further, comps improved 3%, 4%, 4% and 5% in the first, second, third, and fourth quarters of fiscal 2017, respectively.
Additionally, the company’s merchandising measures — including investments in workforce, processes and technology — are the core of Ross Stores’ strategies, keeping it on growth trajectory. It constantly organizes its merchant group, enabling it to expand market coverage steadily in the vendor community while enhancing relationships with broad network of existing and new resources. These initiatives strengthen Ross Stores’ buying operation, facilitating the purchase of in-trend merchandise at attractive prices.
Furthermore, a strong outlook for fiscal 2018 and impressive long-term strategies position the company well for growth in the coming quarters. Based on results in the first half and view for the second half, Ross Stores raised its earnings outlook for fiscal 2018. It now projects earnings per share of $4.01-$4.10 for fiscal 2018 compared with $3.92-$4.05 mentioned earlier. Comps for fiscal 2018 are estimated to increase 1-2%.
Moreover, the company’s focus on store expansion is highlighted by its recent research, which suggests that it has the potential to increase penetration in the existing as well as new markets. Consequently, it raised long-term projected store growth target to 3,000 from 2,500 stated earlier. This will include the opening of nearly 2,400 Ross Dress for Less stores (up from the prior forecast of 2,000) and 600 dd’s DISCOUNTS stores (up from the prior assessment of 500).
What the Zacks Model Unveils
Our proven model shows 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ross Stores’ Earnings ESP of +3.45% and a favorable Zacks Rank #2, make us confident of a beat in the fiscal third quarter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Target Corporation (TGT - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 2.
The TJX Companies Inc. (TJX - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Can Ross Stores (ROST) Retain Positive Earnings Trend in Q3?
Ross Stores, Inc. (ROST - Free Report) is slated to report third-quarter fiscal 2018 results on Nov 20, before the opening bell. In the last reported quarter, the company recorded a positive earnings surprise of nearly 3%.
In the trailing four quarters, Ross Stores outperformed the Zacks Consensus Estimate by an average of 5.1%, with a positive surprise in each quarter. Let’s see how things are shaping up before this announcement.
Ross Stores, Inc. Price and EPS Surprise
Ross Stores, Inc. Price and EPS Surprise | Ross Stores, Inc. Quote
What to Expect?
Investors are keen to know whether this California-based company will be able to continue with its streak of positive earnings and revenue surprises. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 89 cents, reflecting year-over-year growth of 23.6%. Notably, earnings estimates for the fiscal third quarter remained unchanged over the last 30 days. The Zacks Consensus Estimate for revenues is pegged at $3.55 billion, reflecting growth of 6.8% from the year-ago quarter.
Ross Stores has rallied 57.9% in the past year compared with 42.4% growth recorded by the industry. Further, the stock has improved 5.4% in the past month, reflecting a positive sentiment ahead of earnings.
Factors at Play
Ross Stores continued with its upbeat performance, recording positive earnings and sales surprises for the last nine quarters. The company is gaining from continually delivering broad assortments of compelling bargains to value-focused customers.
Further, the company’s solid endeavors, including better price management, merchandising initiatives, cost containment and store-expansion plans position it for growth. Ross Stores’ off-price model renders strong value proposition and micro-merchandising that drive better product allocation and margins. This helped the company to deliver solid top- and bottom-line trends.
We observe that the company's total sales increased 8.9% in second-quarter fiscal 2018, with comparable store sales (comps) growth of 5%. Historically, sales increased 8.5% in first-quarter fiscal 2018. Moreover, it increased 7%, 7.9%, 7.8% and 16% in the first, second, third, and fourth quarters of fiscal 2017, respectively. Moreover, comps increased 3% in first-quarter fiscal 2018. Further, comps improved 3%, 4%, 4% and 5% in the first, second, third, and fourth quarters of fiscal 2017, respectively.
Additionally, the company’s merchandising measures — including investments in workforce, processes and technology — are the core of Ross Stores’ strategies, keeping it on growth trajectory. It constantly organizes its merchant group, enabling it to expand market coverage steadily in the vendor community while enhancing relationships with broad network of existing and new resources. These initiatives strengthen Ross Stores’ buying operation, facilitating the purchase of in-trend merchandise at attractive prices.
Furthermore, a strong outlook for fiscal 2018 and impressive long-term strategies position the company well for growth in the coming quarters. Based on results in the first half and view for the second half, Ross Stores raised its earnings outlook for fiscal 2018. It now projects earnings per share of $4.01-$4.10 for fiscal 2018 compared with $3.92-$4.05 mentioned earlier. Comps for fiscal 2018 are estimated to increase 1-2%.
Moreover, the company’s focus on store expansion is highlighted by its recent research, which suggests that it has the potential to increase penetration in the existing as well as new markets. Consequently, it raised long-term projected store growth target to 3,000 from 2,500 stated earlier. This will include the opening of nearly 2,400 Ross Dress for Less stores (up from the prior forecast of 2,000) and 600 dd’s DISCOUNTS stores (up from the prior assessment of 500).
What the Zacks Model Unveils
Our proven model shows 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ross Stores’ Earnings ESP of +3.45% and a favorable Zacks Rank #2, make us confident of a beat in the fiscal third quarter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Macy’s Inc. (M - Free Report) has an Earnings ESP of +20.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Target Corporation (TGT - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank of 2.
The TJX Companies Inc. (TJX - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>