Ross Stores Reports EPS Beat Amid Weaker Sales

Ross Stores shows resilience as shares rise despite weaker Q3 sales. The discount retailer’s strong EPS of $1.48 boosts investor confidence, projecting nearly 11% growth year-over-year.

Date: 08-02-2025

AI Rating: 7

Ross Stores, Inc. has demonstrated notable performance metrics as outlined in the report. The company reported an earnings per share (EPS) of $1.48 which exceeded expectations. This positive EPS result aided a 2.2% increase in stock prices following the announcement, despite a backdrop of disappointing total sales figures of $5.1 billion in Q3.

Furthermore, a significant aspect is the gross margin expansion, which increased by 70 basis points to 28.3%. This improvement was attributed to decreased freight and supply-chain costs, suggesting efficient cost management which counteracted the effect of softer sales.

Looking towards the future, Ross Stores has raised its full-year EPS forecast to between $6.10 to $6.17, and analysts predict a nearly 11% year-over-year growth in EPS for the fiscal year ending January 2025. The earnings surprise history is encouraging, as the company has outperformed analysts' expectations in the previous four quarters.

The analyst consensus indicates a moderate buy position on the stock, with 14 strong buy ratings, highlighting ongoing confidence in the company despite recent performance setbacks. Although there has been a reduction in strong buy ratings from 18 to 14 over the past three months, the current assessment reflects a balanced view of potential upside.

Overall, while the company faces challenges with sales performance compared to broader market indices, strong EPS figures, a favorable margin outlook, and positive analyst sentiment may counterbalance concerns, providing a nuanced picture of investment potential.

Stocks: ROST