Off-price retail company Ross Stores (NASDAQ:ROST) will be reporting earnings tomorrow afternoon. Here’s what to look for.
Ross Stores missed analysts’ revenue expectations by 1.3% last quarter, reporting revenues of $5.07 billion, up 3% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Is Ross Stores a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Ross Stores’s revenue to decline 1.5% year on year to $5.93 billion, a reversal from the 15.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.65 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Ross Stores has missed Wall Street’s revenue estimates four times over the last two years.
Looking at Ross Stores’s peers in the general merchandise retail segment, some have already reported their Q4 results, giving us a hint as to what we can expect. TJX posted flat year-on-year revenue, beating analysts’ expectations by 1%, and Dillard's reported a revenue decline of 5%, topping estimates by 1%. TJX’s stock price was unchanged after the resultswhile Dillard's was down 4.3%.
Read our full analysis of TJX’s results here and Dillard’s results here.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market has been optimistic as of late due to a soft landing. This is an economic situation where rate hikes successfully quelled inflation but did not send the economy into a recession. Furthermore, recent rate cuts and Donald Trump's triumph in the 2024 Presidential election have been tailwinds for the market, and while some of the general merchandise retail stocks have shown solid performance, the group has generally underperformed, with share prices down 7.4% on average over the last month. Ross Stores is down 4.6% during the same time and is heading into earnings with an average analyst price target of $166.67 (compared to the current share price of $140.32).
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.