Ross Stores lifts profit view on firm demand for discounted apparel
Adds analyst comment in paragraphs 5, 8
By Savyata Mishra
Aug 22 (Reuters) -Ross Stores ROST.O raised its fiscal 2024 profit forecast and posted second-quarter results above Wall Street estimates on Thursday, benefiting from demand for its discounted apparel and easing freight costs.
Its shares rose nearly 6% in extended trading as the company's strategy to cut prices on branded clothing and footwear helped boost stores visits and customer spending per transaction.
"It is reaping the rewards of the improvements to its product assortments to offer a wider selection of brands and at various price points," said Sky Canaves, principal analyst at Emarketer.
The company's results align with trends at off-price peer TJX Cos TJX.N and larger retailers Walmart WMT.N and Target TGT.N, which have shown consumers across income categories are searching for bargains.
Still, CEO Barbara Rentler said Ross Stores was "cautious" on its sales forecast, citing inflationary pressures on the low-to-middle income customers.
Operating margins grew 115 basis points to 12.5% during the quarter, buoyed by higher sales of branded items, as well as lower transport and wage costs.
Higher discounts, however, led to an 80 basis point decline in merchandise margin. The company expects the margin pressure to further increase in the second half.
The company has "seen greater productivity from automation and employee retention, and it will look to find more ways to save on operational costs to offset the impact of discounts on gross margins," Canaves said.
The company logged sales of $5.29 billion, above analysts' average estimate of $5.25 billion, according to LSEG data.
It earned $1.59 per share compared to expectations of $1.50.
Annual earnings per share is expected in the range of $6.00 to $6.13, up from its prior forecast of $5.79 to $5.98.
The company kept unchanged its comparable sales growth forecast of 2% to 3% in the second half of the year.
Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
