(Reuters) – Ross Stores on Thursday raised its fiscal 2024 profit forecast and posted second-quarter results above Wall Street estimates, benefiting from demand for its discounted apparel and easing freight costs.
Its shares rose nearly 6% to $162 in extended trading, after the company also beat second-quarter estimates.
Its results align with trends at off-price peer TJX Cos and larger retailers Walmart and Target, which have shown that consumers across income categories are searching for bargains.
Still, CEO Barbara Rentler said the company was taking a “cautious” approach to sales forecast, citing pressures on the low-to-moderate income customers.
Operating margins grew 115 basis points to 12.5% during the quarter, buoyed by higher sales of branded items and lower transport and wage costs.
Recent internal card data from Bank of America showed that discount retail spending per household has been increasing at a faster rate than overall retail spending since July 2022.
The company logged sales of $5.29 billion for the quarter ended Aug. 3, above analysts’ average estimate of $5.25 billion, according to LSEG data.
It earned $1.59 per share compared to analysts’ average estimate of $1.50.
Annual earnings per share is now expected to be in the range of $6.00 to $6.13, up from its prior forecast of $5.79 to $5.98 per share.
(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)
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