Ross Stores raises profit forecast, even as higher prices hit lower-income shoppers
By Bill Peters
CEO cites 'macroeconomic headwinds that continued to pressure our customers' discretionary spending'
Shares of Ross Stores Inc. rallied in extended trading Thursday after the discount clothing chain raised its full-year profit forecast, even as higher prices continue to hit its low- to middle-income shoppers.
Ross Stores (ROST) said it expected earnings per share of $5.79 to $5.98 for its full fiscal year, up from expectations for $5.64 to $5.89 given in March. The retailer stuck with its same-store sales outlook for a 2% to 3% gain.
Shares were up 6.4% after hours.
Ross Stores reported first-quarter net income of $488 million, or $1.46 a share, compared with $371 million, or $1.09 a share, in the same quarter last year. Revenue rose 8% year over year to $4.9 billion, while same-store sales rose 3%.
Analysts polled by FactSet expected Ross Stores to earn $1.35 a share, on revenue of $4.83 billion and a same-store sales increase of 3.5%.
"Though we had hoped to do better, first-quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers' discretionary spending," Chief Executive Barbara Rentler said in a statement. "Earnings results for the period were better than expected primarily due to lower expenses relative to our plan."
The company's operating margin was 12.2%, up from 10.1% a year ago, due in part to lower distribution and freight costs.
-Bill Peters
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05-23-24 1634ET
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