Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores reported a 4.6% increase in total sales to $5.53 billion, aligning closely with the consensus forecast of $5.54 billion and within the company's guidance range of 2% to 6%. Furthermore, the company anticipates a sales growth of 5% to 7% year-over-year, with expectations for further improvement, as indicated by a projected increase to $5.43 billion. The encouraging metrics, including heightened customer traffic and increased average basket size, highlight Ross Stores' ability to effectively capitalize on its off-price retail model and adapt to market demand.

Ross Stores has projected third-quarter earnings per share (EPS) in the range of $1.31-$1.37, reflecting a decline from both the prior consensus and last year’s EPS of $1.48. Additionally, net interest income is anticipated to decrease significantly to approximately $27 million, down from $43 million in the previous year, further indicating potential financial stress. Compounding these concerns, the company is expected to experience operating margin deleverage of about 150 basis points to 10.5%, which is below consensus expectations, highlighting challenges in maintaining profitability amidst a constrained economic environment.