Ross Stores (ROST) 4Q15 Results: Cautious Outlook Despite Solid Quarter

Executive Summary

• Ross Stores reported 4Q15 revenues of $3.3 billion, up 7.2% year over year and slightly above the consensus estimate of $3.2 billion. EPS was $0.66, beating the consensus estimate by two cents and coming in 9.4% higher than the $0.60 recorded in the year-ago quarter.
• Total comps increased by 4%, on top of last year’s 6% growth, driven by attractive assortments of name brands at value prices, despite a highly promotional retail environment over the holiday season.
• The company provided cautious2016 guidance of 1%–2% comp growth for the year and EPS of $2.59–$2.71, both of which are below consensus estimates.