Ross Stores (NASDAQ:ROST) Shares Gap Up After Better-Than-Expected Earnings

Ross Stores, Inc. (NASDAQ:ROST)’s share price gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $131.86, but opened at $141.86. Ross Stores shares last traded at $143.45, with a volume of 1,416,246 shares trading hands.

The apparel retailer reported $1.46 EPS for the quarter, beating the consensus estimate of $1.35 by $0.11. Ross Stores had a return on equity of 41.15% and a net margin of 9.20%. The company had revenue of $4.86 billion during the quarter, compared to analysts’ expectations of $4.83 billion. During the same period last year, the firm earned $1.09 EPS. The business’s revenue for the quarter was up 8.1% on a year-over-year basis.

Ross Stores Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, June 28th. Stockholders of record on Tuesday, June 11th will be given a dividend of $0.3675 per share. This represents a $1.47 annualized dividend and a dividend yield of 1.03%. The ex-dividend date is Tuesday, June 11th. Ross Stores’s dividend payout ratio is 26.44%.

Ross Stores declared that its Board of Directors has authorized a stock buyback plan on Tuesday, March 5th that allows the company to repurchase $2.10 billion in outstanding shares. This repurchase authorization allows the apparel retailer to purchase up to 4.3% of its stock through open market purchases. Stock repurchase plans are typically a sign that the company’s board of directors believes its stock is undervalued.

Analysts Set New Price Targets

Several analysts have commented on the stock. JPMorgan Chase & Co. upped their target price on shares of Ross Stores from $150.00 to $163.00 and gave the company an “overweight” rating in a research report on Wednesday, March 6th. Guggenheim increased their target price on Ross Stores from $140.00 to $165.00 and gave the company a “buy” rating in a research note on Wednesday, March 6th. The Goldman Sachs Group raised their target price on Ross Stores from $143.00 to $163.00 and gave the stock a “buy” rating in a report on Wednesday, March 6th. Citigroup upped their price target on Ross Stores from $147.00 to $172.00 and gave the company a “buy” rating in a research note on Wednesday, March 6th. Finally, UBS Group boosted their price objective on shares of Ross Stores from $145.00 to $147.00 and gave the company a “neutral” rating in a report on Friday. Four investment analysts have rated the stock with a hold rating and fifteen have issued a buy rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average price target of $155.68.

Insiders Place Their Bets

In other Ross Stores news, CMO Brian R. Morrow sold 10,734 shares of the business’s stock in a transaction that occurred on Wednesday, March 27th. The stock was sold at an average price of $146.00, for a total transaction of $1,567,164.00. Following the transaction, the chief marketing officer now owns 62,711 shares of the company’s stock, valued at approximately $9,155,806. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. In related news, CMO Brian R. Morrow sold 10,734 shares of the stock in a transaction on Wednesday, March 27th. The stock was sold at an average price of $146.00, for a total value of $1,567,164.00. Following the sale, the chief marketing officer now owns 62,711 shares in the company, valued at approximately $9,155,806. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, COO Michael J. Hartshorn sold 21,056 shares of the company’s stock in a transaction on Monday, March 18th. The shares were sold at an average price of $145.14, for a total transaction of $3,056,067.84. Following the completion of the transaction, the chief operating officer now owns 114,488 shares in the company, valued at $16,616,788.32. The disclosure for this sale can be found here. Insiders have sold 71,097 shares of company stock valued at $10,396,178 in the last three months. 2.10% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. lifted its holdings in shares of Ross Stores by 1.2% during the first quarter. Vanguard Group Inc. now owns 28,916,192 shares of the apparel retailer’s stock worth $4,243,740,000 after buying an additional 346,474 shares in the last quarter. Franklin Resources Inc. raised its stake in Ross Stores by 3.4% in the 4th quarter. Franklin Resources Inc. now owns 4,931,795 shares of the apparel retailer’s stock worth $682,511,000 after purchasing an additional 161,202 shares in the last quarter. Wellington Management Group LLP boosted its holdings in Ross Stores by 14.6% in the 4th quarter. Wellington Management Group LLP now owns 4,722,885 shares of the apparel retailer’s stock valued at $653,600,000 after purchasing an additional 601,031 shares during the period. Norges Bank acquired a new position in shares of Ross Stores during the 4th quarter worth approximately $523,185,000. Finally, Northern Trust Corp increased its holdings in shares of Ross Stores by 1.9% during the third quarter. Northern Trust Corp now owns 3,677,191 shares of the apparel retailer’s stock worth $415,339,000 after purchasing an additional 68,518 shares during the period. 86.86% of the stock is owned by institutional investors and hedge funds.

Ross Stores Trading Up 8.4 %

The company has a debt-to-equity ratio of 0.45, a current ratio of 1.77 and a quick ratio of 1.24. The company has a market capitalization of $48.14 billion, a price-to-earnings ratio of 25.65, a P/E/G ratio of 1.98 and a beta of 1.06. The business’s 50-day moving average price is $136.91 and its two-hundred day moving average price is $137.42.

About Ross Stores

Ross Stores, Inc, together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company's Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd's DISCOUNTS stores sell its products at department and discount stores for households with moderate income.