- Ross Stores posted earnings, revenue, and comparable store sales that beat estimates as consumers sought out lower prices.
- CEO Barbara Rentler said shoppers reacted "favorably" to the values Ross Stores offered.
- Rentler warned that because of macroeconomic volatility, high inflation, and geopolitical uncertainty, the company was "prudent" in its outlook.
Ross Stores (ROST) reported better-than-expected results and raised its full-year outlook as high inflation drove consumers to the "off-price" retailer, sending shares up over 5% in early trading Friday.
Ross Stores posted third quarter fiscal 2023 earnings per share (EPS) of $1.33, with revenue increasing 7.9% from a year ago to $4.92 billion. Comparable store sales were up 5%, primarily the result of higher traffic. All three were higher than estimates.
CEO Barbara Rentler said shoppers “responded favorably to the terrific values we offered.” She added operating margin rose to 11.2% from 9.8% “as leverage from the same store sales gain and lower freight costs was partially offset by higher incentives and store wages.”
However, Rentler warned that the retailer continues to face macroeconomic volatility, persistent inflation pressure, and more recently, geopolitical uncertainty. She indicated because of that and difficult sales comparisons from 2022, “we believe it is prudent to maintain a cautious approach to forecasting.”
Ross Stores predicted current quarter EPS of $1.56 to $1.62, while analysts had been looking for $1.61. The company boosted its full-year EPS guidance to a range of $5.30 to $5.36, up from its previous prediction of $5.15 to $5.26.
Shares of Ross Stores traded at their highest level since the spring of 2021 following the news.?