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What's in the Offing for Ross Stores (ROST) in Q1 Earnings?

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Ross Stores, Inc. (ROST - Free Report) is scheduled to release first-quarter fiscal 2020 results on May 21. The off-price retailer of apparel and home accessories delivered a positive earnings surprise of 1.6% in the last reported quarter. Also, its earnings outpaced the Zacks Consensus Estimate by 2.6%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at 7 cents per share, suggesting an increase of 93.8% from the year-ago period’s reported figure. Notably, the consensus estimate has moved down 69.5% over the past 30 days. Moreover, the consensus mark for revenues is pegged at $2.45 billion, indicating a decline of 35.5% from the figure reported in the year-ago quarter.

Ross Stores, Inc. Price and EPS Surprise


Ross Stores, Inc. Price and EPS Surprise

Ross Stores, Inc. price-eps-surprise | Ross Stores, Inc. Quote

Factors to Note

Driven by the ongoing coronavirus pandemic, Ross Stores has closed all its stores for an indefinite period since Mar 20, which is likely to have a bearing on its top and bottom lines in the fiscal first quarter. Moreover, the company withdrew its top and bottom-line guidance for the first quarter and fiscal 2020 in response to the outbreak and its unpredictable impacts.

Additionally, it has undertaken various efforts to preserve financial strength, including employee furloughs, the suspension of share repurchases and the reduction of expenses, to combat rising costs. The company has been working with vendors to cancel merchandise purchase orders and extend payment terms on existing merchandise to reduce the cost burden amid the pandemic. The efforts should provide some cushion to the margins in the to-be-reported quarter.

However, the solid execution of the company’s off-price strategy is expected to have boosted top and bottom lines before the impacts of the coronavirus outbreak surfaced in the quarter under review. Also, its commitment toward pricing, merchandise initiatives, cost containment and store expansion bode well. Notably, the company has been witnessing a decent comps trend over the past few quarters mainly on improved performance across categories and geographic regions.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ross Stores carries a Zacks Rank #5 (Strong Sell) and an Earnings ESP of -319.70%.

Stocks With Favorable Combination

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General Corporation (DG - Free Report) currently has an Earnings ESP of +1.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Kroger Co. (KR - Free Report) presently has an Earnings ESP of +4.52% and a Zacks Rank #2.

Big Lots, Inc. (BIG - Free Report) currently has an Earnings ESP of +18.72% and a Zacks Rank #3.

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