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Key Takeaways
- Ross Stores raised its fiscal 2024 profit outlook and beat analysts’ second-quarter top- and bottom-line expectations.
- Q2 sales rose 7% year-over-year and EPS jumped 20%.
- CEO Barbara Rentler said the company is being cautious with its guidance given the economic challenges faced by its customer base.
Ross Stores (ROST) shares rose Friday, a day after the discount clothing retailer raised its full-year profit outlook but acknowledged a challenging consumer spending environment.
The company now expects fiscal 2024 earnings per share (EPS) between $6 and $6.13, up from its prior range of $5.79 to $5.98. Â
In its second quarter, Ross reported $5.29 billion in sales, up 7% year-over-year, and EPS of $1.59, up 20%. Both the top and bottom lines came in above consensus expectations of analysts polled by Visible Alpha.
Retailer’s Customers Face Discretionary Spending Pressure
However, Chief Executive Officer (CEO) Barbara Rentler stressed that the retailer is taking a “cautious approach” to projecting its sales outlook.
“Our low-to-moderate income customers continue to face persistently high costs on necessities, pressuring their discretionary spending,” Rentler said. “In addition, our prior year sales comparisons become more challenging during the second half of the year amidst an external environment that is uncertain and volatile.”
Shares of Ross rose 1.6% to $154.97 as of 12:30 p.m. ET Friday. They are up 12% in 2024.