DUBLIN, Calif. - Ross Stores, Inc. (NASDAQ: ROST ) saw its stock jump 5.27% in aftermarket trading Thursday after reporting third-quarter earnings that beat analyst expectations, despite sales falling short of estimates.
The off-price retailer posted earnings per share of $1.48 for the quarter ended November 2, 2024, surpassing the analyst consensus of $1.40. Revenue came in at $5.07 billion, below the $5.16 billion analysts had projected. Comparable store sales increased 1% YoY.
While sales growth slowed from the first half of 2024, CEO Barbara Rentler noted that earnings exceeded internal forecasts. Operating margin expanded to 11.9% from 11.2% last year, as lower costs offset a planned decline in merchandise margin.
"Although our low-to-moderate income customers continue to face persistently high costs on necessities pressuring their discretionary spending, we believe we should have better executed some of our merchandising initiatives," Rentler said.
For the fourth quarter, Ross Stores expects comparable store sales to rise 2% to 3%. The company forecasts Q4 EPS of $1.57 to $1.64, below the $1.67 consensus estimate. However, full-year EPS guidance of $6.10 to $6.17 brackets analyst expectations of $6.13.
Ross Stores repurchased 1.8 million shares for $262 million in Q3 and remains on track to buy back $1.05 billion in stock during fiscal 2024.
The company operated 2,192 Ross and dd's DISCOUNTS locations as of quarter-end, up from 2,112 stores a year ago.
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