Risk/Reward Rating: Negative
Ross Stores (Ross) reported excellent Q2 earnings of $1.39 per share easily topping estimates of $.98. For the first six months of the fiscal year, earnings came in at $2.78 per share compared to $2.29 for the same period in calendar year 2019 (calendar 2020 was devastated by COVID making 2019 the better comparison). The stock was down 3% this afternoon in reaction to very weak guidance for the second half of the year.
Business Conditions
Ross Stores is one of the largest off-price apparel and home fashion retail chains in the United States, with over 1,859 locations. The weak guidance reflects the expectation of rapidly increasing expenses referred to in the last stoxdox Ross update. The company is experiencing supply chain inflation in the form of higher freight transportation and raw materials costs.
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