Ross Stores (ROST) Reiterates Guidance Following 3Q Beat; Piper Jaffray Remains Neutral
Piper Jaffray reiterated a Neutral rating on Ross Stores, Inc. (NASDAQ: ROST), and raised the price target to $56.00 (from $55.00), following the company's 3Q earnings report. Comps came in at 3% vs. guidance of +1% to +2% and EPS of $0.53 was above guidance of $0.48 to $0.50. Guidance for FQ4 remain unchanged.
Analyst Neely Tamminga commented, "We are reiterating our Neutral rating and adjusting our estimates on ROST on the heels of their FQ3 earnings release. Comps came in at 3% vs. guidance of +1% to +2% and EPS of $0.53 was above guidance of $0.48 to $0.50. Gross margin was up 40 bps y/y to 28.0% while SG&A expenses were up 10 bps as a percent of sales y/y. Management indicated that the Midwest region continues to be the strongest performing region, while men's was the strongest performing category during the quarter. Guidance for FQ4 remain unchanged: EPS $0.60 to $0.63 aided by comparable store sales gains of flat to +1%. Worth noting as it relates to tracking broader industry trends, traffic was positive during the quarter but cold-weather apparel did come under pressure in October somewhat--indicating to us that weather has played a role in recent lackluster results for the industry."
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Shares of Ross Stores, Inc. closed at $46.20 yesterday.