(Reuters) - Ross Stores (NASDAQ:ROST) forecast annual profit and same-store sales below Wall Street estimates on Tuesday as budget-conscious consumers cut back on discretionary spending amid sticky inflation.
Lower-income customers, whose household budgets have shrunk due to higher pricing pressures, have been compelled to hit a pause on even cheaper non-essential items and limit purchases to essentials such as groceries.
The California-based company's shares were marginally down in extended trading, after CEO Barbara Rentler said it is prudent to take a conservative approach for its 2024 outlook as elevated costs tied to housing, food and gasoline continue to pressure Ross' low-to-moderate income customers' spending.
Ross expects 2024 profit per share between $5.64 and $5.89, compared with market expectations of $5.91, according to LSEG data. The company expects annual same-store sales growth of 2% to 3%, compared with analysts' estimates of 3.13%.
In addition, the company approved a new two-year $2.1 billion stock repurchase authorization for 2024 and 2025.
Ross reported fourth-quarter sales of $6.02 billion, beating market expectations of $5.81 billion on strong product assortments.