Discount apparel chain Ross Stores Inc. surged nearly 9% in premarket trading on Friday after raising its full-year earnings guidance and reporting second-quarter results that exceeded expectations.
The company now expects annual earnings per share in the range of $8.61 to $8.77, up from its prior forecast of $7.50 to $7.74. Comparable store sales are projected to rise between 6% and 7% in the third quarter, compared with analyst estimates of a 3.1% increase, and between 4% and 5% in the fourth quarter, versus expectations of a 2.6% gain.
Ross Stores reported second-quarter revenue of $6.26 billion, a 13% increase from a year earlier and ahead of the $6.18 billion estimate compiled by LSEG. Earnings per share came in at $2.06, beating forecasts and including an estimated $0.60 per share benefit from tariff refunds.
Shares of Ross Stores were last up 8.6% at $248.77, following a 3% decline over the prior two sessions. The stock has gained more than 27% year-to-date, outperforming the S&P 500’s 11.6% advance over the same period.
Analysts at J.P.Morgan and Barclays were among at least four brokerages that raised price targets on the stock following the results. Morningstar analyst Brett Husslein noted that Ross Stores’ strategy of avoiding early price increases to absorb tariff costs last year strengthened its low-price leadership and customer appeal.
The company’s performance contrasts with rival TJX Companies, which reported its own results earlier in the week.
