By Dhirendra Tripathi
Investing.com – Ross Stores, Inc. (NASDAQ:ROST) stock will be under watch when trading starts Wednesday after the company boosted the long-term targets for rolling out its off-price apparel and home fashion stores.
Sales and profitability are also seen higher this year despite tough comparisons and Omicron hurting operations in early January.
A new two-year program to repurchase up to $1.9 billion of stock through the next financial year could also drive the stock. A 9% higher quarterly dividend of 31 cents per share will also influence the stock.
CEO Barbara Rentler said customers are increasingly focusing on value and convenience, a trend reflected at its stores. Also, given that many stores shut last few years, the company has room to add more outlets, according to Rentler.
“. . .We now believe that Ross Dress for Less can expand to about 2,900 locations, up from our prior target of 2,400, and that dd’s Discounts can eventually become a chain of approximately 700 stores, versus our previous projection of 600. . .,” she said in a company statement.
The new forecast for store additions will take the total count to 3,600 stores from 1,923 locations as of January 29.
According to Rentler, comparable sales could rise by up to 3% in the year ending January 28, 2023. At worst, they will be flat. Earnings per share are seen between $4.71 and $5.12 compared to $4.87 in 2021.
Total sales for 2021 grew 18% to $19 billion. Sales for the fourth quarter were $5 billion, with comparable store sales up 9% versus the same period in 2019.
Fourth quarter operating margin suffered due to higher freight, wages, and Covid-related costs.