Ross Stores (ROST) Withdraws Guidance On COVID-19 Impacts

Ross Stores, Inc. (NASDAQ:ROST) provided an update on the COVID-19 impact on its operations. Despite beginning the fiscal on a solid note, the company withdrew its top and bottom-line guidance for fiscal 2020 and the first quarter in response to the ongoing COVID-19 outbreak and its unpredictable impacts.

Notably, the company has witnessed a dismal sales trend over the past week, following better-than-expected sales in February. This downside can be attributable to the ongoing pandemic, which led to a significant decline in store traffic as well as store closures in various markets. In fact, more stores are expected to close in the near future.

Further, to safeguard financial liquidity, the company suspended its share repurchase program and cut its capital expenditure and other expenses. Also, management has drawn $800 million from its revolving credit facility to add to its cash balance. Further, the company is making efforts to match its inventory as per the recent sales trend.

This Zacks Rank #3 (Hold) company plunged 43.1 % in the past three months compared with the industry’s decline of 16.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During its fourth-quarter earnings call, the company predicted fiscal 2020 earnings per share of $4.67-$4.88, inclusive of the ongoing pressure from tariffs. Further, sales were envisioned to grow 4-5%, with comps growth of 1-2%. For the first quarter of fiscal 2020, the company anticipated earnings per share of $1.16-$1.21 along with a 4-5% improvement in total sales, with comps growth of 1-2%.

Well, many other retailers, including Ulta Beauty (NASDAQ:ULTA) , American Eagle Outfitters (NYSE:AEO) and Abercrombie (NYSE:ANF) , have taken similar actions like store closures and guidance withdrawal as the COVID-19 crisis started affecting its business. Notably, Ulta Beauty temporarily shut down all stores nationwide till at least Mar 31 and withdrew its fiscal 2020 view. Meanwhile, American Eagle closed all stores in the United States and Canada till Mar 27 and withdrew its first-quarter fiscal 2020 outlook. Additionally, Abercrombie closed its stores in North America and EMEA till Mar 28 and withdrew its first-quarter and 2020 guidance.

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