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Tuesday, Ross Stores, Inc. (NASDAQ:ROST) maintained its Neutral stock rating and a $152.00 price target from Citi analysts. According to InvestingPro data, the company maintains a GOOD financial health score and trades at an attractive PEG ratio of 0.83, suggesting reasonable valuation relative to growth. The analysts anticipate Ross Stores' fourth-quarter earnings per share (EPS) to slightly exceed the consensus and guidance figures. They have modeled a comparable store sales increase of 2.5%, aligning with both the consensus and the company's guidance of 2-3%, while they expect total sales to decrease by 2.3%, within the guided range of a 2-3% drop. This decline is attributed to the challenge of comparing against an extra week in the previous year's financial calendar.
The upcoming earnings call will mark the first for new CEO Jim Conroy, who took the helm on February 2, 2025. With a solid track record of maintaining dividend payments for 31 consecutive years and a recent dividend growth of 9.7%, Ross Stores demonstrates strong financial stability. Analysts predict that Conroy will express optimism about Ross Stores' growth potential, although he may set conservative expectations for fiscal 2025. The management is expected to forecast comparable store sales growth of 2-3% for fiscal 2025, which is slightly below the consensus estimate of 3.1%. Furthermore, the EPS guidance is projected to be set between $6.45 and $6.70, compared to a consensus expectation of $6.70.
Investor sentiment towards Ross Stores is believed to be generally negative based on discussions with investors, according to Citi analysts. This sentiment sets a lower bar for the company as it approaches its earnings report. The analysts' commentary suggests that the fourth-quarter results will be an indicator of whether Ross Stores' strategy shift towards providing more value on better brands is resonating with consumers.
The company's performance, particularly in comparable store sales, will be closely watched as an indicator of the retailer's ability to navigate the competitive discount retail landscape. With an impressive return on equity of 43% and healthy gross margins of 32.6%, Ross Stores stands as a prominent player in the Specialty Retail industry. The guidance provided by the new CEO will be scrutinized for insights into the company's strategic direction and operational focus under his leadership. For deeper insights into Ross Stores' financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and 8 additional ProTips in the detailed Pro Research Report.
In other recent news, Ross Stores, Inc. has reported noteworthy developments. The company's third-quarter earnings per share (EPS) of $1.48 surpassed both the analyst's expectation and the Visible Alpha consensus estimates. Despite a modest increase of 1% in comparable store sales, Ross Stores has raised its full-year 2024 EPS guidance to a range of $6.10 to $6.17. BofA Securities maintains its Buy rating on Ross Stores, with a price target of $180, reflecting the company's successful execution of merchandising strategies and positive outlook.
CFRA, on the other hand, maintained a Hold rating on shares of Ross Stores with a steady price target of $154. The firm adjusted its fiscal year 2025 EPS forecast, raising it by $0.15 to $6.15. Meanwhile, Evercore ISI updated its financial outlook for Ross Stores, raising the price target to $180 from the previous $170, while retaining an Outperform rating on the stock. The firm anticipates that the pressures on merchandise margins will substantially lessen in 2025.
These recent developments highlight Ross Stores' ability to navigate a challenging retail environment and deliver results above expectations. The company continues to attract consumers with its value-oriented offerings and is committed to maintaining momentum. The updated EPS guidance by management underscores the company's positive outlook.
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