All about savings, Ross Stores (NASDAQ: ROST) stock leaps on strong earnings and revenue beat

Ross Stores Inc (NASDAQ: ROST) shares jumped more than 5% in premarket trading Friday after the off-price retailer reported first quarter results that significantly exceeded Wall Street expectations, driven by robust comparable store sales growth and strong customer traffic.

The company posted adjusted earnings per share of $2.02, beating the analyst consensus of $1.71 by $0.31. Revenue reached $6 billion, surpassing the $5.6 billion estimate and representing a 21% increase from $5 billion in the same quarter last year. Comparable store sales surged 17% compared to flat sales in the prior year period.

Operating margin reached 13.4%, well above the company’s initial plan of 11.8% to 12.1%, primarily due to the strong sales performance. Chief Executive Officer Jim Conroy attributed the results to “superb execution throughout the business, especially the transition of our Spring assortment.” He noted that customer traffic was the primary driver, with compelling merchandise assortments and ongoing marketing initiatives resonating with shoppers.

“Expectations were high into this print, and Ross delivered, with a 17% comp and margin beat,” Bernstein analyst Aneesha Sherman said in a note. “Mgmt’s confident tone will likely push up numbers beyond FY guide, as the market expects more beats and raises through the year.”