Sometimes, the simplest story is the best one: people shopped at Ross Stores, and they shopped a lot. The off-price retailer reported its fourth-quarter results after the bell on Tuesday, and the numbers were good enough to send the stock higher.
How good? Let's start with the basics. Ross Stores reported earnings of $2 per share, comfortably beating the consensus estimate of $1.89. Revenue came in at $6.64 billion, also ahead of the $6.41 billion analysts were looking for. That revenue figure represents a 12% jump from the same period last year, and the engine behind it was a 9% increase in comparable store sales. When your core business is growing at nearly a double-digit clip, you're doing something right.
"We are pleased to report that business momentum accelerated further in the fourth quarter, with both sales and earnings significantly surpassing our expectations," said Jim Conroy, CEO of Ross Stores (ROST). He credited compelling holiday merchandise, new marketing campaigns, and in-store initiatives for the strong performance.
Looking ahead, the company's guidance suggests it expects the good times to keep rolling, but maybe not at the same breakneck pace. For the first quarter, Ross sees earnings per share between $1.60 and $1.67, which brackets the analyst estimate of $1.62. For the full year, it's forecasting EPS in the range of $7.02 to $7.36, with the consensus sitting right in the middle at $7.17. It's not a blowout forecast, but it's a solid one that shows management isn't seeing any sudden drop-off.
Investors liked what they saw. Shares of Ross Stores were up 6.26% in after-hours trading, changing hands at $210.02. When you beat estimates and then guide in line with them, the market tends to reward you for the execution. For now, Ross seems to be executing just fine.
