Here's Why Ross Stores (ROST) Stock Popped Today

Shares of Ross Stores, Inc. (NASDAQ:ROST) jumped 10.67% in trading on Friday, closing at $59.02 per share, after reporting better-than-expected second quarter fiscal 2017 results.

Ross reported earnings of $0.82 per share, beating the Zacks Consensus Estimate of $0.76. Earnings grew 15.49% year-over-year. The company also reported revenue of $3.431 billion, surpassing our estimate of $3.370 billion and growing 7.88% year-over-year.

The company also stated that comparable store sales rose 4%. Ross Stores expects to earn between $0.64 and $0.67 per share during the third quarter.

This positive earnings report comes in sharp contrast to falling retail stocks resulting from poor earnings and sales this week. Today, Foot Locker (NYSE:FL) fell 28% after missing analyst expectations, dragging other athletic retailers along with it. L Brands (NYSE:LB) , the owner of Victoria’s Secret, also tumbled on Wednesday after reporting disappointing sales and a weak outlook for the third quarter.

Ross owes its success partially to its strategy of being an off-price retailer. The company offers designer and brand name products at deeply discounted rates. This has attracted consumers to its 1,340 U.S. stores, allowing Ross to succeed despite e-commerce retailer threats, like from Amazon.com (NASDAQ:AMZN) .

TJX Companies Inc (NYSE:TJX) , which owns T.J. Maxx, Marshalls, and the popular HomeGoods, also reported second quarter earnings this week that beat our estimates. The success of both these off-price companies demonstrates that department stores like Macy’s (NYSE:M) and Nordstrom (NYSE:JWN) aren't doing well just because of online competition, but because consumers want quality products at low prices.

ROST remains a Zacks Rank #3 (Hold), with a VGM score of ‘A.’

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