Categories Earnings, Retail

Ross Stores stock falls on weak Q2 outlook

Ross Stores (ROST) reported a 0.7% rise in earnings for the first quarter of 2019 helped by higher sales and lower provision for taxes. The results exceeded analysts’ expectations. However, the off-price retail apparel and home fashion operator guided second-quarter earnings below consensus estimates. Following this, the stock inched down over 2% in the after-market session.

Net income inched up 0.7% to $421.14 million and earnings increased by 3.6% to $1.15 per share. The results included about $0.02 per share benefit from favorable timing of expenses that are expected to reverse over the balance of the year.

Total sales grew 6% to $3.8 billion. Comparable store sales rose 2% compared to the previous year’s gain of 3%. The company delivered sales gains at the high end of its guidance as well as better-than-expected EPS growth despite continued underperformance in Ladies apparel.

Ross Stores first quarter comparable stores sales snapshot

Looking ahead into the second quarter of 2019, the company expects comparable store sales growth in the range of 1% to 2% on top of a 5% gain last year. Earnings are anticipated to be in the range of $1.06 to $1.11 per share, up from $1.04 per share in the prior-year quarter.

For fiscal 2019, Ross Stores lifted its earnings guidance to the range of $4.38 to $4.52 per share from the prior range of $4.30 to $4.50 per share. This is compared to the previous year quarter’s earnings of $4.26 per share.

While the operating margin of 14.1% was down from the prior year, it was above the company’s expectations mainly due to higher merchandise margin. As expected, this improvement was more than offset by increases in freight and wage costs and the timing of pack-away related expenses that benefited the prior year period.

Also Read:  With record subscriptions, Netflix earnings trigger stock rally

Also read: Hibbett Sports Q1 earnings preview

During the first quarter of fiscal 2019, Ross Stores repurchased 3.4 million shares of common stock for an aggregate price of $320 million. As planned, the company remained on track to buy back a total of $1.275 billion in common stock during fiscal 2019.

Shares of Ross Stores ended Thursday’s regular session down 0.02% at $94.51 on the Nasdaq. The stock has risen over 14% in the past year and over 15% in the year so far.

We’re on Apple News! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

Infographic: Intuit Inc. reports Q3 2020 earnings results

Intuit Inc (NASDAQ: INTU) reported the quarterly financial results for its third quarter of fiscal 2020 after the regular trading hours on Thursday. The company missed analysts' estimates for the

Hewlett Packard Enterprise (HPE) slips to a loss in Q2, misses estimates

Hewlett Packard Enterprise Company (NYSE: HPE) reported its financial results for the quarter ended April 30, 2020, on Thursday after the market closes. The results missed analysts' expectations. The company

Take-Two Interactive Software (TTWO): Growth in sector won’t help if games don’t impress

Take-Two Interactive Software Inc. (NASDAQ: TTWO) had a particularly strong Q4 2020 with revenue growth in the double-digits and profits up 116%. The restrictions brought on by the COVID-19 health

Top