ARTICLE LINK: http://www.investopedia.com/stock-analysis/EarningsPreview/RossStoresSecondQuarterEarningsPreview.aspx?partner=YahooSA#axzz23R6vyaTz
In the lead up to Ross Stores' (Nasdaq:ROST) announcement of its second quarter earnings on Thursday, August 16, 2012, analysts' expectations have improved over the past month from 79 cents per share to the current projection of earnings of 81 cents per share.
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: The consensus estimate for Ross' earnings is 81 cents per share, up 26.6% from a year ago when the company reported earnings of 64 cents per share.
In the last 90 days, this has risen from 75 cents. Analysts are expecting earnings of $3.45 per share for the fiscal year.
Ross is expected to beat last year's reported revenue of $2.09 billion and come in at $2.32 billion for the quarter. Revenue of $9.59 billion is expected for the fiscal year.
Company Performance: Compared to the industry average of 17.87, ROST's P/E ratio of 22.4 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: The consensus estimate for Ross' earnings is 81 cents per share, up 26.6% from a year ago when the company reported earnings of 64 cents per share.
In the last 90 days, this has risen from 75 cents. Analysts are expecting earnings of $3.45 per share for the fiscal year.
Ross is expected to beat last year's reported revenue of $2.09 billion and come in at $2.32 billion for the quarter. Revenue of $9.59 billion is expected for the fiscal year.
Company Performance: Compared to the industry average of 17.87, ROST's P/E ratio of 22.4 is quite high. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Can Investors Trust the P/E Ratio?
The stock price has increased from $61.18 on May 15, 2012 to $67.16 over the past quarter. The stock saw one of its worst stretches when its price fell $4.57 per share between June 26, 2012 and June 28, 2012.
The Competition: Ross Stores operates two chains of off-price retail apparel and home accessories stores in the United States and Guam. The company's closest competitor in the retail (apparel) industry, Gap (GPS), will report earnings on August 16, 2012. Analysts are expecting earnings of 48 cents per share for Gap, up 37.1% from last year's earnings of 35 cents per share. Analysts are less optimistic about Ross than about Gap. Ten out of 23 analysts rate the latter a buy compared to nine of 21 for the former.
The Competition: Ross Stores operates two chains of off-price retail apparel and home accessories stores in the United States and Guam. The company's closest competitor in the retail (apparel) industry, Gap (GPS), will report earnings on August 16, 2012. Analysts are expecting earnings of 48 cents per share for Gap, up 37.1% from last year's earnings of 35 cents per share. Analysts are less optimistic about Ross than about Gap. Ten out of 23 analysts rate the latter a buy compared to nine of 21 for the former.
Read more: http://www.investopedia.com/stock-analysis/EarningsPreview/RossStoresSecondQuarterEarningsPreview.aspx?partner=YahooSA#ixzz23R7EumR8
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