What Happened: Shares of off-price retail company Ross Stores (NASDAQ:ROST) jumped 5.7% in the morning session after the company reported third quarter results with revenue outperforming Wall Street's estimates, driven by better-than-expected same-store sales growth and more new store openings. Gross margin also exceeded expectations. On the other hand, its earnings forecast for next quarter missed analysts' expectations, with management expecting decelerating same-store sales growth thanks to the uncertain macro environment. Overall, this quarter's results seemed fairly positive, and shareholders should feel optimistic.
Is now the time to buy Ross Stores? Find out by reading the original article on StockStory.
What is the market telling us: Ross Stores's shares are somewhat volatile and over the last year have had 2 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 7.1% on the news that the company reported second quarter earnings that exceeded analysts' expectations for same-store sales, revenue, and earnings per share.
Moving ahead, management raised second half sales and earnings outlook. Comparable store sales for the third and fourth quarters of 2023 are expected to be up 2% to 3% and up 1% to 2%, respectively. As such, EPS guidance for the next quarter and the full year were also both ahead of expectations.
The company also continued to return cash to shareholders adding, "During the second quarter, we repurchased 2.2 million shares of common stock for an aggregate price of $230 million. As previously announced, we expect to buy back $950 million of common stock this year under our two-year $1.9 billion repurchase program that extends through fiscal 2023." Overall, this was a solid quarter for Ross Stores.
Ross Stores is up 9.8% since the beginning of the year. Investors who bought $1,000 worth of Ross Stores's shares 5 years ago would now be looking at an investment worth $1,394.
