What happened
Shares of clothing retailer Ross Stores (ROST 2.91%) jumped as much as 26.6% on Friday, but the stock is up 9.1% at the time of this writing.
Bullish sentiment from the Street toward Ross follows the company's solid third-quarter results, which featured better-than-expected revenue and earnings per share (EPS).
Ross's third-quarter net sales were $3.3 billion, up 8% year over year. EPS was $0.72, up 16% from the year-ago quarter. On average, analysts were expecting revenue and EPS of about $3.26 billion and $0.67, respectively.
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So what
"Our third-quarter sales and earnings outperformed our expectations despite being up against our toughest prior-year comparisons and two major hurricanes during the quarter," said Ross CEO Barbara Rentler about the quarter. She went on to note that the results reflected Ross' "continued market-share gains in a challenging retail environment."
The quarter's outperformance was driven primarily by a mix of higher-margin merchandise as well as leverage associated with the company's better-than-expected sales.
Comparable store sales were also up a strong 4% year over year, on top of a 7% rise from the year-ago quarter.
Now what
In light of the company's momentum, management opted to boost its guidance for the fourth quarter and its full year. Management said it now expects comparable sales growth of between 2% to 3% for the 13-week period ending Jan. 27. For the full fiscal year, management now expects EPS to be between $3.24 and $3.28.
