Ross Stores, Inc (NASDAQ: ROST)
On Tuesday March 6th, 2018, Ross Stores reported their fourth quarter earnings after the market closed for trading. The company, which competes with the names like Burlington Coat Factory, Urban Outfitters, and TJ Maxx just to name a few, had been in a steady up uptrend since the middle of 2017.
Share’s had found multiple levels of support as they progressed higher. However, after the dismal guidance that the company announced going forward, shares will likely close below a recent area of support and now will have to find new buyers to come in and prop up the shares.
One thing that might help prop them up is the dividend, which currently is .82% per year. While that might not sound like much it is still more than you can earn in your local bank. Shares closed the regular session at $80.51 however, they closed the after hours session at $75.57 , or down 6.14%.
The Numbers
The company reported earnings $1.19 per share, which handily beat the $0.94 per share that analysts had projected. Last year the same quarter saw the company earned $0.77 per share. Sales rose by 16% to +$4.1 billion dollars.
The area of disappointment came in their forward guidance. The company expects same-store sales growth of between 1 and 2% for fiscal 2018. This is well below what analyst were expecting of 3.5%.
Company Comments
Barbara Rentler, Chief Executive Officer, had this to say in the conference call:
“Despite our own difficult multi-year comparisons and a very competitive retail climate, sales and earnings were well ahead of our expectations for both the fourth quarter and the full year. We are pleased with these results, which reflect our ongoing success in delivering broad assortments of compelling bargains to today’s value-driven shoppers.Fourth quarter operating margin grew 95 basis points to 14.6%, up from 13.6% in the prior year. This improvement was driven by a combination of strong merchandise margin, expense leverage from solid gains in same store sales, and the impact of the 53rd week. For the 2017 fiscal year, operating margin increased 50 basis points to a record 14.5%.
While we are encouraged by our recent strong sales and earnings results, we again face our own challenging multi-year comparisons as well as a very competitive retail environment. As a result, although we hope to do better, we continue to take a prudent approach to forecasting our business in 2018.”
ROST Charts
The above price chart shows Ross Stores on the daily timeframe going back to June of 2017. You can see that shares have basically been on a consistent upward trend: however, after the today’s earnings release shares will likely open below the green support line on the upper right side of the chart.
The above price chart shows Ross Stores in the regular trading session and the after-hours trading session. It is easy to see on the right side (after-hours)when the earnings were announced and shares dropped, then went sideways, and then a bit lower toward the close of the after-hours session.
Company Profile
Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. It primarily offers apparel, accessories, footwear, and home fashions.
The company’s Ross Dress for Less stores sell its products at savings of 20% to 60% off department and specialty store regular prices primarily to middle income households; and dd’s DISCOUNTS stores sell its products at savings of 20% to 70% off moderate department and discount store regular prices to customers from households with moderate income.
As of October 9, 2017, it operated 1,412 Ross Dress for Less stores in 37 states, the District of Columbia, and Guam; and 205 dd’s DISCOUNTS stores in 16 states. The company was founded in 1982 and is headquartered in Dublin, California.-YahooFinance
