SPOTLIGHT: ROSS STORES (ROST)
I wanted to share a reply I made to a reader via email. ROST November same store sales increased according to the latest news:
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ÿÿÿ NEWARK, Calif., Dec. 4 /PRNewswire/ -- Ross Stores, Inc. (ROST)
(Nasdaq: ROST) today reported sales of $190 million for the four weeks ended November 29, 1997, a 13% increase above the $168 million in sales for the four weeks ended November 30, 1996.ÿ Comparable store sales for the same period increased 8% vs. a 13% increase in the prior year.ÿ
ÿÿÿ For the ten months through November 29, 1997, sales totaled $1.606 billion, a 19% increase above the $1.348 billion in sales for the prior year's comparable period ended November 30, 1996.ÿ For the ten months, comparable store sales increased 11% vs. a 12% for the same period in the prior year.ÿ
ÿÿÿ Ross Stores, Inc. operates a national chain of off-price retail stores offering first quality, in-season, branded apparel and apparel-related merchandise for the entire family at prices that average 20% to 60% less than department and specialty stores, as well as merchandise for the home at similar savings.ÿ The company had 326 stores at November 29, 1997, compared to 313 stores at the end of the same period last year.ÿ
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The next earnings report isÿdue out around March 19, 1998.ÿ The record date for the current dividend payment was Dec. 05, 1997 and payment will be made on January 05, 1998.ÿ ROST is still selling really cheap! From a technical standpoint, the ROST stock tends to drop in price in early December through January and then bounces off the 200-day moving average. That technical indicator is NORMAL for ROST this time of year! ROST tends to then pivot at that point (bottom support level) which should be for us in the +- $30 dollar mark this time around. We are closing in timewise to that point!
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The ROST fundamentals continue to look fantastic! NASDAQ: (ROST : $33 1/4) $1,620 million Market Cap at December 26, 1997 ranks 635th in the Fortune 1,000 on Revenue & 619th on Profit. Employs 14,855. ROST trades at a 38% Discount PE Multiple of 14.3 X, vs. the 23.1 X average multiple at which the Discount & Variety Stores SubIndustry is priced. Earnings projections were recently increased (Zack's Research) to $2.31 EPS x 23 avg.P/E = $53+ would be the fair value for the ROST stock.
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Everything has been getting hit over the past month! There are some good bargains out there! Our economy seems to be moving along just fine, US Gov. has a surplus for the first time in many years, inflation is almost none existing, new tax cuts, and interest rates are going down. The near future puts ROST in a good position. The average hard working middle income family will continue to shop at ROSS stores (ROST). That is the ROST niche which they obviously must be filling very well to sell over a BILLION DOLLARS worth of goods!
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Another ROST split is possible to drive the price back up to $42 to $46 range. If you recall, the 2-1 ROST split in March 1997 was at a pre-split price of $42 down to $22. ROST marched right back up to the $42 price in only 9.5 months! That is one smoking stock! ROST added 13 stores this past year and still managed to increase % same store sales of over ONE and HALF BILLION DOLLARS and earnings. One top of that, ROST increased the dividends!ÿ ROST is a strong CC workhorse you won't lose sleep over! |
