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Will Ross Stores (ROST) Retain Its Earnings Beat Streak in Q3?
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Ross Stores, Inc. (ROST - Free Report) is scheduled to release third-quarter fiscal 2022 results on Nov 17. The off-price retailer of apparel and home accessories is likely to have witnessed revenue and earnings declines in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $4.36 billion, indicating a decline of 4.7% from the figure reported in the year-ago quarter. For fiscal third-quarter earnings, the consensus mark of 80 cents per share suggests a decline of 26.6% from the year-ago quarter's reported number. The consensus mark for earnings has moved down by a penny in the past 30 days.
In the last reported quarter, Ross Stores delivered an earnings surprise of 13.3%. It has delivered an earnings beat of 14.1%, on average, in the trailing four quarters.
Ross Stores has been witnessing robust customer demand, aiding the top line. Sales in the fiscal third quarter are likely to have benefited from broad-based growth across merchandise categories and regions, as well as robust comparable store sales. Sales are also expected to have gained from robust trends at the dd's DISCOUNTS business. Gains at the core business, driven by consumers' continued focus on value and the company’s ability to deliver value bargains to customers, bode well.
On its last reported quarter’s earnings call, Ross Stores stated that the ongoing strength in consumer demand would likely continue despite the uncertainty regarding supply-chain woes.
Ross Stores has been consistent with the execution of its store expansion plans, which are likely to have aided the top line. The company's store-expansion efforts have been focused on continually increasing penetration in existing and new markets. The third-quarter fiscal 2022 performance is anticipated to have gained from the company’s return to normal store opening targets. Gains from new stores are expected to get reflected in the company's sales for the fiscal third quarter.
However, Ross Stores has been witnessing the effects of the ongoing industry-wide supply-chain challenges, leading to higher freight costs and distribution expenses. This is likely to have partly impacted the company’s cost of goods sold rate in the fiscal third quarter. Higher domestic freight expenses and distribution costs mainly on the ongoing supply-chain headwinds and higher wages are likely to have weighed on earnings in the to-be-reported quarter.
On the last reported quarter's earnings call, Ross Stores anticipated continued impacts from the industry-wide supply-chain dynamics and other risks from inflation, as well as costs within its business, to hurt the fiscal third-quarter performance. Ross Stores provided a conservative view for the rest of fiscal 2022.
Ross Stores anticipates comps to be down 7-9% for third-quarter fiscal 2022, whereas it reported 14% growth in third-quarter fiscal 2021. Earnings per share are envisioned to be 72-83 cents, whereas it reported $1.09 in third-quarter fiscal 2021.
For third-quarter fiscal 2022, the company expects the operating margin to be 7.8-8.7%, down from 11.4% reported in the prior-year quarter. The operating margin is expected to be affected by the negative comp forecast, lower merchandise margin stemming from ocean freight costs and sluggish sales view, and increased markdowns. Also, the unfavorable timing of packaway-related costs is likely to hurt the operating margin.
Zacks Model
Our proven model conclusively predicts an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Ross Stores has a Zacks Rank #2 and an Earnings ESP of +3.13%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.46% and a Zacks Rank of 2. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has been unchanged in the past 30 days at 51 cents per share. The consensus estimate suggests a 62.5% decline from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 3. The company is likely to register a decrease in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
Macy’s top line is expected to have declined year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +6.57% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 results. The consensus mark for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests 6.5% growth from the figure reported in the prior-year quarter.
The consensus mark for DLTR’s quarterly earnings has been unchanged in the past 30 days at $1.16 per share. The consensus estimate suggests growth of 20.8% from the year-ago quarter’s reported figure.
Image: Bigstock
Will Ross Stores (ROST) Retain Its Earnings Beat Streak in Q3?
Ross Stores, Inc. (ROST - Free Report) is scheduled to release third-quarter fiscal 2022 results on Nov 17. The off-price retailer of apparel and home accessories is likely to have witnessed revenue and earnings declines in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $4.36 billion, indicating a decline of 4.7% from the figure reported in the year-ago quarter. For fiscal third-quarter earnings, the consensus mark of 80 cents per share suggests a decline of 26.6% from the year-ago quarter's reported number. The consensus mark for earnings has moved down by a penny in the past 30 days.
In the last reported quarter, Ross Stores delivered an earnings surprise of 13.3%. It has delivered an earnings beat of 14.1%, on average, in the trailing four quarters.
Ross Stores, Inc. Price and EPS Surprise
Ross Stores, Inc. price-eps-surprise | Ross Stores, Inc. Quote
Key Factors to Note
Ross Stores has been witnessing robust customer demand, aiding the top line. Sales in the fiscal third quarter are likely to have benefited from broad-based growth across merchandise categories and regions, as well as robust comparable store sales. Sales are also expected to have gained from robust trends at the dd's DISCOUNTS business. Gains at the core business, driven by consumers' continued focus on value and the company’s ability to deliver value bargains to customers, bode well.
On its last reported quarter’s earnings call, Ross Stores stated that the ongoing strength in consumer demand would likely continue despite the uncertainty regarding supply-chain woes.
Ross Stores has been consistent with the execution of its store expansion plans, which are likely to have aided the top line. The company's store-expansion efforts have been focused on continually increasing penetration in existing and new markets. The third-quarter fiscal 2022 performance is anticipated to have gained from the company’s return to normal store opening targets. Gains from new stores are expected to get reflected in the company's sales for the fiscal third quarter.
However, Ross Stores has been witnessing the effects of the ongoing industry-wide supply-chain challenges, leading to higher freight costs and distribution expenses. This is likely to have partly impacted the company’s cost of goods sold rate in the fiscal third quarter. Higher domestic freight expenses and distribution costs mainly on the ongoing supply-chain headwinds and higher wages are likely to have weighed on earnings in the to-be-reported quarter.
On the last reported quarter's earnings call, Ross Stores anticipated continued impacts from the industry-wide supply-chain dynamics and other risks from inflation, as well as costs within its business, to hurt the fiscal third-quarter performance. Ross Stores provided a conservative view for the rest of fiscal 2022.
Ross Stores anticipates comps to be down 7-9% for third-quarter fiscal 2022, whereas it reported 14% growth in third-quarter fiscal 2021. Earnings per share are envisioned to be 72-83 cents, whereas it reported $1.09 in third-quarter fiscal 2021.
For third-quarter fiscal 2022, the company expects the operating margin to be 7.8-8.7%, down from 11.4% reported in the prior-year quarter. The operating margin is expected to be affected by the negative comp forecast, lower merchandise margin stemming from ocean freight costs and sluggish sales view, and increased markdowns. Also, the unfavorable timing of packaway-related costs is likely to hurt the operating margin.
Zacks Model
Our proven model conclusively predicts an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Ross Stores has a Zacks Rank #2 and an Earnings ESP of +3.13%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +2.46% and a Zacks Rank of 2. The company is likely to register declines in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for BURL’s quarterly earnings has been unchanged in the past 30 days at 51 cents per share. The consensus estimate suggests a 62.5% decline from the year-ago quarter’s reported number.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ quarterly revenues is pegged at $2.1 billion, which suggests a decline of 10.9% from the figure reported in the prior-year quarter.
Macy's (M - Free Report) currently has an Earnings ESP of +18.92% and a Zacks Rank of 3. The company is likely to register a decrease in the top and bottom lines when it reports third-quarter fiscal 2022 numbers. The consensus mark for M’s quarterly earnings has moved up by a penny in the past 30 days to 19 cents per share. However, the consensus estimate suggests an 84.6% decline from the year-ago quarter’s reported number.
Macy’s top line is expected to have declined year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.17 billion, which suggests a rise of 4.9% from the figure reported in the prior-year quarter.
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +6.57% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2022 results. The consensus mark for DLTR’s quarterly revenues is pegged at $6.8 billion, which suggests 6.5% growth from the figure reported in the prior-year quarter.
The consensus mark for DLTR’s quarterly earnings has been unchanged in the past 30 days at $1.16 per share. The consensus estimate suggests growth of 20.8% from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.