Ross Stores, Inc. (NASDAQ:ROST) stock rose 7.60% (As on Mar 2, 11:24:44 AM UTC-4, Source: Google Finance) after the company posted better than expected earnings for the fourth quarter of FY 21 benefited from strong customer demand during the holiday season, which aided sales, offset by the negative impacts of the surge in Omicron cases during the peak holiday selling period and continued supply-chain congestions. The operating margin of 9.8% declined 350 bps from fourth-quarter fiscal 2019. As of Jan 29, 2022, Ross Stores operated 1,923 outlets, including 1,628 Ross stores across 40 states, the District of Columbia and Guam, as well as 295 dd’s DISCOUNTS stores in 21 states. The company plans to open 30 stores in first-quarter fiscal 2022, comprising 22 Ross and eight dd’s DISCOUNTS. For the fiscal year, the company expects to return to normal store opening targets, with plans to open 100 stores. This will include 75 Ross and 25 dd’s DISCOUNTS stores. Additionally, it anticipates closing 10 older stores in fiscal 2022. Ross Stores ended fiscal 2021 with cash and cash equivalents of $4,922.4 million, long-term debt of $2,452.3 million, and total shareholders’ equity of $4,060.1 million.

ROST in the fourth quarter of FY 21 has reported the adjusted earnings per share of $1.04, beating the analysts’ estimates for the adjusted earnings per share of 97 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 18.1 percent to $5.02 billion in the fourth quarter of FY 21, missing the analysts’ estimates for revenue of $5.03 billion. Sales benefited from broad-based growth across certain merchandise categories and regions, as well as robust comparable store sales (comps). The children and men’s categories performed well in the holiday selling period, and the Midwest and Southeast regions were the outperforming regions. Sales trends were also robust at the dd’s DISCOUNTS business. In fourth-quarter fiscal 2021, comps increased 9% from fourth-quarter fiscal 2019, owing to higher average basket size, partly offset by a decline in transactions.

The company’s board has increased the quarterly cash dividend by 9 percent to 31 cents per share to be payable on March 31, 2022 to stockholders of record as of March 15, 2022.

For fiscal 2022, the company plans to spend $800 million toward capital expenditure. For fiscal 2022, ROST expects comps to be flat to up 3% compared with 13% growth in fiscal 2021. Total sales are expected to increase 2-6% in fiscal 2022. Earnings per share for fiscal 2022 are envisioned to be $4.71-$5.12 per share compared with $4.87 in fiscal 2021.