Ross Stores, Inc. (NASDAQ: ROST) has opened 30 new stores in 15 U.S. states and Guam since February. The new openings include eight dd’s DISCOUNTS stores and 22 Ross Dress for Less (Ross) stores.
Shares of this apparel retail chain lost 4.8% on Monday, ending the trading session at $85.12.
Ross Stores operates two major retail chains, Ross and dd’s DISCOUNTS. These chains/stores offer apparel, footwear, accessories, and home fashion products in the District of Columbia, Guam, and various U.S. states. It is headquartered in Dublin, CA.
New Openings Part of Bigger Targets
The company noted that it currently has 1,952 Ross and dd’s DISCOUNTS stores in Guam, 40 U.S. states, and the District of Columbia. The new openings are part of the company’s plans to open roughly 100 new stores in the Fiscal Year 2022 (ending January 28, 2023). Of the total, 75 store openings are expected for Ross and 25 for dd’s DISCOUNTS.
The store openings and the targets for the Fiscal Year 2022 will help Ross Stores to fulfill its long-term plans (discussed on March 1).
Ross Stores targets total stores to be 3,600 in the long term, reflecting an increase of 20% from its previous projection. Of the total, 2,900 stores are expected for Ross, up from 2,400 predicted earlier, and 700 stores for dd’s DISCOUNTS versus 600 mentioned previously.
Official Comment
Gregg McGillis, Group Executive Vice-President, Property Development, said, “Our continued expansion of both chains also demonstrates our commitment to further building our presence in both existing and newer markets.”
Snapshot of Q4 Results and Projections
On March 1, Ross Stores delivered better-than-expected results for the fourth quarter of Fiscal Year 2021 (ended January 29, 2022). Its earnings of $1.04 surpassed the consensus estimate of $0.98 by 6.1%. Revenues in the quarter were $5.02 billion, up 1% from the consensus estimate of $4.97 billion.
For the Fiscal Year 2022, the company anticipates earnings per share to be within the $4.71-$5.12 range and comparable store sales to be flat or increase up to 3% year-over-year. In the previous year, the company’s earnings were $4.87 per share and comparable store sales increased 13%.
For the first quarter, the company predicts solid demand, and a hike in wages and high freight to play important roles. Comparable store sales are predicted to decline 2%-4% year-over-year and earnings per share to be within the $0.93-$0.99 range.
Stock Rating
Recently, Kimberly Greenberger, an analyst at Morgan Stanley, maintained a Buy rating on Ross Stores and a price target of $137 (60.95% upside potential).
Another analyst at Cowen, John Kernan, reiterated a Neutral rating on the company and increased the price target to $108 (32.75% upside potential) from $103.
Wall Street is cautiously optimistic about Ross Stores’ growth opportunities and has a Moderate Buy consensus rating based on 10 Buys and 5 Holds. The average ROST price target of $117.47 suggests 38.01% upside potential from current levels. Over the past year, shares of Ross Stores have decreased 28.6%.
Smart Score
Ross Stores scores a “Perfect 10” from TipRanks’ Smart Score rating system, mirroring the stock’s potential to outperform market expectations.
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