Ross Stores stock jumps 5% on strong Q2 results, upbeat guidance

DUBLIN, Calif. - Ross Stores, Inc. (NASDAQ:ROST ) saw its shares surge 5% in after-hours trading on Thursday after the off-price retailer reported better-than-expected second quarter results and raised its full-year outlook.

The company posted earnings per share of $1.59 for the quarter ended August 3, beating analyst estimates of $1.50. Revenue rose 7% YoY to $5.3 billion, also topping expectations of $5.24 billion. Comparable store sales increased 4% compared to the same period last year.

"Second quarter sales and earnings were above our expectations as our stronger value offerings resonated with our customers," said CEO Barbara Rentler in a statement.

Looking ahead, Ross Stores provided an upbeat forecast for the full fiscal year 2025, projecting earnings per share between $6.00 and $6.13. This outlook surpassed the consensus analyst estimate of $6.01 per share.

The company cited additional efficiencies expected in the second half of 2024 as a factor in its improved guidance. However, management maintained a cautious stance on sales projections, noting persistent pressure on discretionary spending among its low-to-moderate income customer base.

For the third and fourth quarters, Ross anticipates comparable sales growth of 2% to 3%, building on strong gains of 5% and 7% respectively in the prior year periods.

"Delivering the great values that our off-price customers have come to expect from us is more important than ever, especially given the continued pressures they face from the high costs on necessities," Rentler added.

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Source: Investing.com