Ross Stores Inc (NASDAQ:ROST) stock fell 1.93% (As on March 1, 11:07:31 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 22.
ROST in the fourth quarter of FY 22 has reported the adjusted earnings per share of $1.31, beating the analysts’ estimates for the adjusted earnings per share of $1.23. The company had reported the adjusted revenue of $5.21 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $5.13 billion.
Ross Stores expects full-year earnings to be $4.65 to $4.95 per share. Total sales are planned to grow by 2% to 5% for the 53 weeks ending February 3rd, 2024. Comparable store sales for the 52 weeks ending January 27, 2024 are planned to be relatively flat. Based on these sales plans, operating margin for the full year is expected to be in the range of 10.3% to 10.7%. For 2023, the company expects to open approximately 100 new locations, comprised of about 75 Ross and 25 dd’s DISCOUNTS. As usual these openings do not include the plans to close or relocate about 10 older stores. Net interest income is estimated to be $115 million, depreciation and amortization expense, inclusive of stock based amortization is forecast to be about $570 million for the year. The tax rate is projected to be about 24% to 25%, and diluted shares outstanding are expected to be approximately $339 million. In addition, capital expenditures for 2023 are planned to be approximately $810 million
For the first quarter, elevated inflation continues to impact the low to moderate income customer, as such, the company is also planning comparable store sales to be relatively flat for the 13 weeks ending April 29, 2023. This compares to a 7% decrease and a 13% gain in the first quarters of 2022 and 2021 respectively. If sales perform in line with this plan, the company expects earnings per share for the first quarter of 2023 to be $0.99 to $1.05 versus $0.97 last year. Total sales are planned to be up 1% to 4% versus last year’s first quarter. The company expects first quarter operating margin to be 9.6% to 9.9% compared to 10.8% last year. Further, merchandise margin is forecast to benefit from lower freight costs. We plan to add 19 new stores, consisting of 11 Ross and eight dd’s DISCOUNTS during the period. Net interest income is estimated to be $28 million.