: Ross’s stock rallies more than 4% after retailer raises outlook

Shares of Ross Stores Inc. ROST rose more than 4% in the extended session Thursday after the retailer beat Wall Street expectations for its second quarter and raised its guidance, saying budget-conscious customers are “responding well” to its off-price offerings. Ross earned $446 million, or $1.32 a share, in the quarter, compared to $385 million, or $1.11 a share, in the year-ago period. Sales rose to $4.9 billion, from $4.6 billion a year ago. Analysts polled by FactSet expected Ross to report earnings of $1.16 a share on sales of $4.8 billion. Ross’s same-store sales were up 5%, contrasting with a drop of 7% in the second quarter of 2022, the company said. “Along with easing inflationary pressures, customers responded well to our improved value offerings throughout our stores,” Chief Executive Barbara Rentler said in a statement. Despite “the recent moderation in inflation, our low-to-moderate income customer continues to face persistently higher costs on necessities. As such, we believe it is prudent to continue to plan the business cautiously,” Rentler said. Ross, however, raised its sales and earnings outlook for the second half of the year, saying it expects comparable-store sales for the third and fourth quarters to be up 2% to 3% and up 1% to 2%, respectively. It called for third-quarter EPS of $1.16 to $1.21 and between $5.15 and $5.26 for the fiscal year. “Moving forward, we remain focused on delivering the most compelling bargains possible while also carefully managing our expenses and inventory to maximize our potential for both sales and earnings growth,” Rentler said.

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