Ross Stores(ROST) ZACKS·2025-01-09 18:55Stock Performance - Ross Stores Inc (ROST) stock gained 9 9% in the past three months outperforming the Retail-Wholesale sector growth of 6 5% and the Zacks Retail - Discount Stores industry growth of 3 6% [1] - ROST shares also surpassed the S&P 500 index's rise of 3 6% [1] Growth Strategies - The company benefits from store-expansion plans and its off-price retailing model offering branded and designer goods at discounted prices [2] - Ross Stores concluded its store-expansion plans for fiscal 2024 by opening 47 stores which are expected to capture extra sales and boost overall profits [4] - Management expects to expand "Ross Dress for Less" to 2 900 stores and dd's DISCOUNTS to 700 stores in the long term [5] - The off-price model offers a strong value proposition and micro-merchandising driving better product allocation and margins [7] Financial Estimates - The Zacks Consensus Estimate for Ross Stores' fiscal 2024 earnings per share (EPS) has risen 0 8% to 6 67 in the past seven days [8] - For fiscal 2024 the Zacks Consensus Estimate for ROST sales and EPS implies growth of 3 7% and 11% respectively year over year [9] - For fiscal 2025 the consensus mark for sales and EPS indicates a 5 6% and 8 1% year-over-year increase respectively [9] Valuation - Ross Stores stock is trading at a forward 12-month price/earnings ratio of 23 27 lower than the industry's 30 33 [11] - The stock is trading lower than its high of 79 52 [11] Challenges - Ross Stores has been witnessing higher costs and macroeconomic volatility including rising inflation and geopolitical uncertainty [12] - The cost of goods sold is predicted to increase 2 8% year over year for fiscal 2024 [12] - Selling general and administrative expenses are expected to increase 5 7% year over year for the fiscal fourth quarter and 4% for fiscal 2024 [12] - Management envisions earnings per share to be in the bracket of 1 64 for fourth-quarter fiscal 2024 down from $1 82 in fourth-quarter fiscal 2023 [13] Comparable Store Sales - Comparable store-sales (comps) rose 1% in the third quarter of fiscal 2024 driven by increased customer traffic and basket size [15] - This led to a sales increase of 3% year over year in the same quarter [15] Industry Picks - Deckers (DECK) sports a Zacks Rank 1 (Strong Buy) with current financial-year sales growth estimated at 13 6% and an average earnings surprise of 41 1% in the trailing four quarters [16] - Boot Barn (BOOT) carries a Zacks Rank 2 (Buy) with current financial-year sales growth estimated at 13 4% and a trailing four-quarter earnings surprise of 6 8% on average [17] - Abercrombie (ANF) carries a Zacks Rank of 2 with current financial-year sales growth estimated at 13% and an earnings surprise of 16 8% in the last reported quarter [18][20]