Ross Stores (NASDAQ: ROST), a discount chain department store with over 1,200 locations across the Unites States, released its fourth quarter and fiscal year 2014 results on February 26th.
Ross Stores reported fourth quarter earnings per share of $1.20 on a diluted basis, above the analyst consensus of $1.11 and representing an 18% year-over-year increase. The report posted fourth quarter sales revenue of $3.03 billion, beating the analyst consensus of $2.93 billion and rising 11% from the same quarter of last year. Ross Stores also announced a new $1.4 billion stock repurchase program through fiscal year 2016 and an 18% increase in quarterly cash dividend to $0.235 per share.
CEO Barbara Rentler commented, “We are pleased with our fourth quarter sales and earnings, both of which were well ahead of our expectations.” However, Rentler remained wary when offering the company’s 2015 guidance noting, “As we enter 2015, we continue to face ongoing uncertainty and volatility in the macro-economic and retail climates. While we hope to do better, based on these external factors and our own challenging multi-year sales and earnings comparisons, we are remaining somewhat cautious in our outlook.” Ross Stores forecasts earnings per share for the first quarter 2015 between $1.21 and $1.26.
On February 27th, analyst Kimberly Greenberger of Morgan Stanley maintained an Overweight rating on Ross Stores and raised her price target from $93 to $102. Greenberger noted, “ROST has not missed a quarterly comp or EPS guidance in 7 years.” The analyst points out “a healthier low end consumer helped by a reduced unemployment rate y/y and lower gas prices boosting ROST sales growth. These factors could benefit the first 2-3 quarters of 2015.” Continuing to look forward, Greenberger notes, “Assuming the recently improved consumer trends remain intact, with ROST’s track record of stellar execution, we think 2015 easily exceeds the top end of guidance and could deliver +LDD EPS growth again.”
Kimberly Greenberger currently has a 49% overall success rate recommending stocks with a +6.6% average return per recommendation. She has rated ROST 5 times since August 2013, earning a 60% success rate recommending the department store and a +19% average return per ROST recommendation.
Separately on February 27th, analyst Robert Drbul of Nomura Securities reiterated a Buy rating on Ross Stores and raised his price target from $100 to $112. Drbul noted that the company’s Q4 report beat estimates and highlighted a “6% comp sales increase, which is the highest reported 4Q comp in our group so far.” The analyst continued, “This reinforces our belief that the off-price channel remains on track.”
Robert Drbul has a 57% overall success rate recommending stocks with a +3.5% average return per recommendation. This is his second time rating ROST and in February 2014 he rated it a Buy, earning an +11.4% return.
On average, the analyst consensus for Ross Stores on TipRanks is Moderate Buy.
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