:max_bytes(150000):strip_icc()/GettyImages-2161988401-f4db14c4192b4225ab50465cd84c1c15.jpg "Ross Stores raises forecast but warns against discretionary spending")
Key findings
- Ross Stores raised its earnings forecast for fiscal 2024 and beat analysts’ second-quarter revenue and earnings expectations.
- In the second quarter, sales increased 7% year-over-year and earnings per share jumped 20%.
- CEO Barbara Rentler said the company was cautious in its forecasts given the economic challenges facing its customers.
Ross Stores (ROST) shares rose on Friday, a day after the discount clothing retailer raised its full-year earnings forecast while acknowledging a challenging environment for consumer spending.
The company now expects earnings per share (EPS) for fiscal year 2024 to be between $6 and $6.13, up from the previous range of $5.79 to $5.98.
In the second quarter, Ross reported revenue of $5.29 billion, up 7% year over year, and earnings per share of $1.59, up 20%. Both revenue and earnings were above consensus expectations of analysts surveyed by Visible Alpha.
Retail customers are under pressure to limit their spending
However, CEO Barbara Rentler stressed that the retailer is being “cautious” when forecasting its sales prospects.
“Our low- to moderate-income customers continue to face persistently high costs for essentials, putting pressure on their spending on other items,” Rentler said. “In addition, comparing our revenues to those of the previous year will become more difficult in the second half of the year due to an uncertain and volatile external environment.”
Ross shares rose 1.6% to $154.97 at 12:30 p.m. ET on Friday. They are expected to rise 12% in 2024.
