Ross Stores, Inc. (NASDAQ:ROST) Surpasses Earnings Expectations

• Ross Stores, Inc. (NASDAQ:ROST) reported a third-quarter earnings per share (EPS) of $1.48, beating the estimated $1.41.
• The company's revenue for the quarter was $5.07 billion, slightly below the estimated $5.15 billion, yet showed growth from the previous year.
• Ross Stores has adjusted its annual profit forecast upwards, reflecting reduced freight and supply-chain costs, despite facing challenges in the fourth quarter.

Ross Stores, Inc. (NASDAQ:ROST) is a prominent player in the retail sector, known for its off-price retail apparel and home fashion offerings. The company operates under the Ross Dress for Less and dd's DISCOUNTS brands, providing customers with a wide range of products at competitive prices. Ross Stores competes with other discount retailers like TJX Companies and Walmart, which also focus on offering value to budget-conscious consumers.

On November 21, 2024, Ross Stores reported its third-quarter earnings, revealing an earnings per share (EPS) of $1.48, which exceeded the estimated $1.41. This performance highlights the company's ability to deliver better-than-expected results, as it has consistently outperformed consensus EPS estimates over the past four quarters. The earnings surprise for this quarter was 6.47%, showcasing the company's strong financial management.

Despite the positive earnings, Ross Stores' revenue for the quarter was $5.07 billion, slightly below the estimated $5.15 billion. This shortfall represents a 1.56% miss from the Zacks Consensus Estimate. However, the revenue still marks an increase from the $4.92 billion reported in the same period last year, indicating growth in the company's sales performance.

Ross Stores has adjusted its annual profit forecast upward, attributing this to reduced freight and supply-chain costs. This positive outlook led to a 7% rise in the company's shares after the announcement. However, the company has also adjusted its fourth-quarter profit expectations due to challenges faced by its low-to-moderate income customers, who are dealing with high costs on necessities that limit their discretionary spending.

Financially, Ross Stores has a price-to-earnings (P/E) ratio of approximately 22.28, indicating the price investors are willing to pay for each dollar of earnings. The company's price-to-sales ratio is about 2.23, reflecting the market's valuation of its revenue. Additionally, the debt-to-equity ratio is approximately 1.04, suggesting a balanced approach to financing its assets. The current ratio of 1.57 indicates that Ross Stores has a comfortable level of liquidity to cover its short-term liabilities.