Shares of Ross Stores Inc. rose more than 4% in extended trading Thursday after the company joined other off-price retailers in beating Wall Street expectations for its second quarter and raising guidance, saying budget-conscious customers are “responding well” to its bargain offerings.
TJ Maxx and Marshalls parent TJX Cos.
TJX,
topped analysts’ estimates and raised its outlook on Wednesday. Earlier Thursday, Wal-Mart Inc.
WMT,
did the same, although the retail giant said its customers are still weary from high inflation. Target Inc.
TGT,
bucked that trend somewhat, reporting a mixed quarter on Wednesday.
At Ross
ROST,
“customers responded well to our improved value offerings throughout our stores” along with “easing inflationary pressures,” Chief Executive Barbara Rentler said in a statement accompanying results.
Ross earned $446 million, or $1.32 a share, in the second quarter, compared to $385 million, or $1.11 a share, in the year-ago period.
Sales rose to $4.9 billion, from $4.6 billion a year ago. Analysts polled by FactSet expected Ross to report earnings of $1.16 a share on sales of $4.8 billion.
Ross’s same-store sales were up 5%, contrasting with a drop of 7% in the second quarter of 2022, the company said.
Ross shoppers were no less pinched, however. Despite “the recent moderation in inflation, our low- to moderate-income customer continues to face persistently higher costs on necessities. As such, we believe it is prudent to continue to plan the business cautiously,” Rentler said.
Despite that prudent stance, Ross raised its sales and earnings outlook for the second half of the year, saying it expects comparable-store sales for the third and fourth quarters to be up 2% to 3% and up 1% to 2%, respectively.
It called for third-quarter EPS of $1.16 to $1.21 and between $5.15 and $5.26 for the fiscal year.
“Moving forward, we remain focused on delivering the most compelling bargains possible while also carefully managing our expenses and inventory to maximize our potential for both sales and earnings growth,” Rentler said.
Shares of Ross are down nearly 3% so far this year, contrasting with an advance of 14% for the S&P 500 index
SPX.
This story originally appeared on Marketwatch
