Ross Stores Q3 Profit Jumps 83%, but Q4 and Full-Year Forecasts Fall Short (ROST)

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Discount apparel and home goods retailer Ross Stores, Inc. (ROST) on Thursday said its third quarter profit jumped 83% from last year, but its fourth quarter and full-year guidance fell short of expectations.

The Pleasanton, California-based company reported third quarter net income of $105 million, or 84 cents per share, up from $57 million, or 44 cents per share, in the year-ago period. Sales rose 12% from last year, to $1.74 billion.

On average, Wall Street analysts expected a smaller profit of 78 cents per share, on matching sales of $1.74 billion.

Looking ahead, the company predicted fourth quarter earnings to range from 88 to 94 cents per share, while analysts expect 98 cents per share. For the full year, Ross said it sees earnings of $3.27 to $3.33 per share, which would fall below analyst estimates for $3.36 per share.

Ross Stores shares fell 88 cents, or -1.9%, in premarket trading Thursday.

The Bottom Line
We recently removed shares of ROST from our “recommended” list back on Oct.28, when the stock was trading at $45.05. The company has a dividend yield of .96%, based on last night’s closing stock price of $46.07. The stock has technical support in the $40-$42 price area. If the shares can firm up, we see overhead resistance around the $50 price level. We would remain on the sidelines for now.

Ross Stores, Inc. (ROST) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

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