Retail stock to watch: Ross Stores, Inc. (NASDAQ: ROST)

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Ross Stores, Inc. (NASDAQ: ROST) stock fell over 3.2% in the pre-market session of March 4th, 2020 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19 and on weak outlook. For the first quarter ending of 2020, the company expects comparable store sales to be up 1% to 2% and earnings per share is expected to be in the range of $1.16 to $1.21 versus $1.15 for the first quarter ended May 4, 2019. First quarter operating margin is expected to be in the range of 13.6% to 13.8% versus last year’s 14.1%. For fiscal 2020, the company expects the same store sales to grow in the range of 1% to 2% and earnings per share is expected to be in the range of $4.67 to $4.88. The company also plans to open about 100 stores this year, consisting of approximately 75 Ross Dress for Less and 25 dd’s DISCOUNTS locations.

The company has reported the profit of $456.1 million, for its quarter that ended Feb. 1, up from earnings of $441.7 million, the year earlier. For the fourth quarter, the best performing major merchandise area was Children’s, while the Midwest was the strongest region. dd’s DISCOUNTS customers continue to perform strongly to its merchandise assortments leading to another quarter and year of robust gains in both sales and operating profit.

ROST in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.28, while reported the adjusted revenue to $4.41 billion in the fourth quarter of FY 19. The comparable store sales was up 4%, on top of a 4% gain in the prior year period.

During the fourth quarter and fiscal 2019 the company had repurchased an aggregate of 2.7 million and 12.3 million shares of common stock, respectively, for the total price of $309 million in the fourth quarter and $1.275 billion for the full year. These purchases were made according to the two-year $2.55 billion program announced in March 2019. The company anticipate to complete the $1.275 billion remaining under the authorization in fiscal 2020.

ROST has declared the quarterly cash dividend of $.285 per share, which represents an increase of 12% over the prior year. This higher quarterly dividend will be payable on March 31, 2020 to stockholders of record as of March 17, 2020.

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