Ross Stores (ROST): Solid Beat On Offprice - Stifel
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Stifel analyst, Richard Jaffe, reiterated his Hold rating on Ross Stores, Inc. (NASDAQ: ROST) after the company reported 2Q EPS of $0.71, $0.04 above consensus and the high end of management’s guidance. EPS increased 12% compared with an 11% increase last year. Results include a $0.01/share benefit from favorable expense timing that is expected to reverse in the second half. The beat was driven by better than expected sales, which drove greater expense leverage.
Strong results despite a promotional environment, a difficult comparison and an execution issue within ladies’ apparel as the off-price sector remains favored with customers who are responding positively to the company's competitively priced, appealing, nationally recognized, branded merchandise.
So why the hold rating? ROST and TJX are trading at similar valuations, the analyst favors TJX over ROST due to 1) TJX’s positioning as the largest and dominant player in the off-price market, which provides the company with a better opportunity to acquire attractive product, 2) the company’s greater growth prospects (numerous, global brands) and 3) its higher dividend yield. For an analyst ratings summary and ratings history on Ross Stores, Inc. click here. For more ratings news on Ross Stores, Inc. click here.
Shares of Ross Stores, Inc. closed at $62.88 yesterday.
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