Ross Stores Price Targets, Shares Up After Revenue Beat

Ross Stores shares rose as three analysts raised their share-price targets for the discount apparel/home retailer.
Publish date:

Ross Stores  (ROST) - Get Report shares rose Friday as three analysts raised their share-price targets after the discount apparel/home retailer reported stronger-than-expected revenue.

In the third quarter ended Oct. 31, revenue registered $3.75 billion, down 3% from $3.85 billion last year. The FactSet analyst consensus called for $3.42 billion in the latest quarter. Same-store sales dipped 3%, too.

“Sales trends accelerated during the third quarter following a slower start in August, driven by an improvement in our merchandise assortments, a later back-to-school season, stronger performance in our larger markets, and our return to more normal store hours,” Chief Executive Barbara Rentler said in a statement.

Ross recently traded at $114.99, up 4.4%. The shares slipped 5.3% year to date through Thursday. The coronavirus pandemic has curbed in-store visits.

The company reported profit of $131.2 million, or 37 cents a share, for the latest quarter, down from $370.9 million, or $1.03 a share, in the year-earlier quarter. The analyst consensus called for 59 cents a share in the latest quarter.

The operating margin narrowed to 4.4% in the latest quarter from 12.4%. A one-time debt refinancing charge accounted for 6.4 percentage points, the company said. 

Margins also were hurt by higher covid-related operating costs.

Still, “core business results improved during the quarter, demonstrating consumers’ continued focus on value,” Rentler said.

As for the analysts, RBC Capital raised its share-price target to $130 From $100, based on market-share potential. It has an outperform rating. 

J.P. Morgan lifted its target to $125 from $112 and affirmed an overweight rating.

And Deutsche Bank analyst Paul Trussell boosted his target to $123 from $119, keeping a buy rating.