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Ross Stores Inc. shares rose more than 4% in the after-hours session Thursday after the discount retailer reported a better-than-expected quarter and tweaked its guidance for the year, saying people reacted favorably to its off-price merchandise.
Ross
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earned $447 million, or $1.33 a share, in the third quarter, compared with $342 million, or $1 a share, in the year-ago quarter.
Sales rose to $4.9 billion, from $4.6 billion a year ago, and comparable-store sales rose 5%, the company said.
Analysts polled by FactSet expected the company to report adjusted earnings of $1.22 a share on sales of $4.84 billion in the quarter. Same-store sales were seen up 3%.
“We are pleased that both sales and earnings outperformed our expectations for the quarter as customers responded favorably to the terrific values we offered throughout our stores,” Chief Executive Barbara Rentler said in a statement.
Ross, however, continues “to face macroeconomic volatility, persistent inflation, and more recently, geopolitical uncertainty,” Rentler said.
The store kept its fourth-quarter EPS guidance to between $1.56 and $1.62, which would compare with $1.31 a share in the prior year. Based on results so far and an extra week in the fiscal year, however, it forecast the year’s EPS to be between $5.30 and $5.36, compared with a previous guidance of between $5.15 and $5.26 for the year.
“Despite the current macroeconomic and geopolitical uncertainties, we remain confident in the resilience of the off-price sector and our ability to operate successfully within it,” the CEO said. “Our business model offers shoppers both value and convenience, and we believe consumers’ heightened focus on these important factors bodes well for us for the foreseeable future.”
