Ross Stores (ROST) Q2 Earnings Beat, Soft View Hurts Stock
Zacks Investment Research | Aug 23, 2019 08:07AM ET
Ross Stores, Inc. (NASDAQ:ROST) reported strong second-quarter fiscal 2019 results, wherein earnings and sales beat estimates. Further, the company’s operating profit margin benefited from the timing of expenses in the reported quarter.
Despite the robust results, shares of Ross Stores declined nearly 1.9% in the after-hours session on Aug 22. This was mainly attributed to the company’s narrowed earnings view for fiscal 2019 on impacts of additional tariffs on goods sourced from China, including apparel and footwear. Earnings per share for fiscal 2019 are now expected to be $4.41-$4.50, whereas it reported $4.26 in fiscal 2018. Earlier, it projected earnings per share of $4.38-$4.52 for fiscal 2019.
Based on the impacts of tariffs, the company expects earnings per share of 92-96 cents for the fiscal third quarter and $1.20-$1.25 for the fourth quarter, whereas it earned 91 cents and $1.20 in the respective year-ago periods.
Nevertheless, the Zacks Rank #3 (Hold) stock has gained 15.8% in the past three months, outperforming the industry ’s 6.7% growth.
Q2 Highlights
Ross Stores posted earnings of $1.14 per share, which beat the Zacks Consensus Estimate of $1.12 and surpassed the company’s guidance of $1.06-$1.11. Further, earnings grew nearly 9.6% from $1.04 reported in the prior-year period. Earnings mainly gained from favorable timing of expenses to the tune of nearly 2 cents per share, which are likely to reverse in the second half of fiscal 2019.
Ross Stores, Inc. Price, Consensus and EPS Surprise
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