Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores has demonstrated a positive sales trajectory, with total sales increasing by 4.6% to $5.53 billion, closely aligning with both consensus expectations and company guidance. The company's strategic focus on driving foot traffic and increasing transaction sizes has resulted in uplifted average unit retail (AUR) and units per transaction (UPT), indicating robust consumer demand. Furthermore, management has increased sales guidance to a 6%-8% year-over-year growth range, surpassing previous market expectations, reflecting strong performance across various product categories and regions.

Ross Stores is projecting a decrease in third-quarter earnings per share (EPS) to a range of $1.31-$1.37, down from $1.48 in the previous year, signaling potential challenges in profitability. Additionally, net interest income is expected to decline significantly from $43 million last year to approximately $27 million, indicating a decrease in financial performance amidst rising costs. Furthermore, the company's operating margin is anticipated to contract by around 150 basis points to 10.5%, which is below earlier consensus estimates, highlighting ongoing pressure on profitability despite some beat of previous guidance in recent quarters.