Shares of Ross Stores, Inc. (ROST – Free Report) jumped 10.67% in trading on Friday, closing at $59.02 per share, after reporting better-than-expected second quarter fiscal 2017 results.
Ross reported earnings of $0.82 per share, beating the Zacks Consensus Estimate of $0.76. Earnings grew 15.49% year-over-year. The company also reported revenue of $3.431 billion, surpassing our estimate of $3.370 billion and growing 7.88% year-over-year.
The company also stated that comparable store sales rose 4%. Ross Stores expects to earn between $0.64 and $0.67 per share during the third quarter.
This positive earnings report comes in sharp contrast to falling retail stocks resulting from poor earnings and sales this week. Today, Foot Locker (FL – Free Report) fell 28% after missing analyst expectations, dragging other athletic retailers along with it. L Brands (LB – Free Report) , the owner of Victoria’s Secret, also tumbled on Wednesday after reporting disappointing sales and a weak outlook for the third quarter.
Ross owes its success partially to its strategy of being an off-price retailer. The company offers designer and brand name products at deeply discounted rates. This has attracted consumers to its 1,340 U.S. stores, allowing Ross to succeed despite e-commerce retailer threats, like from Amazon.com (AMZN – Free Report) .
TJX Companies Inc (TJX – Free Report) , which owns T.J. Maxx, Marshalls, and the popular HomeGoods, also reported second quarter earnings this week that beat our estimates. The success of both these off-price companies demonstrates that department stores like Macy’s (M – Free Report) and Nordstrom (JWN – Free Report) aren’t doing well just because of online competition, but because consumers want quality products at low prices.
ROST remains a Zacks Rank #3 (Hold), with a VGM score of ‘A.’
Want to learn more about retail? Check out our recent podcast on the topic below!
4 Surprising Tech Stocks to Keep an Eye on
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really take off.
See Stocks Now>>