Ross Stores(ROST) Benzinga·2025-03-05 18:06Core Viewpoint - Telsey Advisory analyst Dana Telsey has reiterated a Market Perform rating on Ross Stores Inc (ROST) and lowered the price forecast from 150.00, reflecting concerns over the company's future performance and outlook [1]. Financial Performance - ROST reported fourth-quarter EPS of 1.82 but above the consensus estimate and guidance of 1.64, with the earnings beat driven by a 5.912 billion, slightly missing consensus expectations [1]. Margins and Growth - Comparable store sales grew by 3%, outperforming the 2.6% consensus, while gross margin contracted to 26.5%, below estimates; however, better cost control led to an operating margin of 12.4%, beating expectations [2]. - The initial FY25 outlook for total sales growth is projected at 1% – 5%, which falls short of expectations [2]. Future Guidance - FY25 EPS is estimated to be between 6.55, lower than the 6.67 [3]. - The first-quarter FY25 guidance is also below expectations, with sales projected to decline by 1% to increase by 3%, compared to a prior consensus of a 6% rise; comparable store sales are expected to fall between -3% and 0%, below the consensus of 2.4% [3]. Market Conditions - The company experienced growth in traffic and basket size; however, sales slowed toward the end of the fourth quarter and continued to decelerate into the first quarter due to unseasonable weather and an uncertain macro environment [4]. - The company faces pressure from shifts affecting its core lower-income customers, leading to conservative outlooks for the first quarter and FY25 [4]. Revised Projections - The analyst has lowered the FY25 sales growth outlook to 4.6% YoY growth to 22.33 billion; the EPS estimate for FY25 has been adjusted down to 6.70 [5]. - ROST shares are trading higher by 1.38% at $137.84 as of the last check [5].