We maintain our 12-month price target of $138, based on 23.0x our FY 25 (Jan.) EPS estimate and slightly lower than the company’s 5-year average forward P/E multiple of 23.9x. We maintain our FY 25 and FY 26 EPS estimates of $6.00 and $6.40, respectively. ROST posts normalized Q1 EPS of $1.46 vs. $1.09, $0.11 above consensus estimates on revenues of $4.86B vs. $4.50B and $32M above estimates. Comparable store sales increased 3% Y/Y while total revenues increased 8%. Management said that Accessories and Children were the best-selling categories while California and the Pacific Northwest were the strongest regions. The company also stated that dd’s Discounts outperformed Ross as customers responded well to better value. Inventory was up 10% Y/Y with average store inventory up 4% and in line with sales growth. ROST guided for comp store sales up 2% to 3% and EPS of $5.98 at the high point. […]

Shares of Ross Stores were trading sharply higher Friday after the discount retailer easily beat quarterly estimates and lifted guidance. Late Thursday, Ross posted earnings per share of $1.46 for its fiscal first quarter, beating Wall Street’s call for $1.35, according to FactSet. Sales of $4.86 billion topped the consensus call for $4.83 billion. Same-store sales ticked 3% higher. Ross stock was up 6.8% to $140.80 in premarket trading Friday, while futures tracking the S&P 500 edged 0.3% higher. “Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending,” CEO Barbara Rentler said in the earnings release. “Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan.” For its fiscal second quarter, the company expects same-store sales to rise 2% to 3% and is calling for earnings per