Why Ross Stores Stock Topped the Market Today

Ross Stores (NASDAQ: ROST) was a post-earnings winner of a stock on Friday after posting its second-quarter results following market hours Thursday. Clearly satisfied with the news, investors bid the discount retailer's shares up by nearly 2%. This was just enough to edge past the gain of the lively S&P 500 index that day.

A double beat in the second quarter

Ross's total sales amounted to $5.3 billion, representing a 7% improvement year over year. The retailer's net income according to generally accepted accounting principles ( GAAP) standards was $527 million, or $1.59 per share. That was quite a robust 18% higher than the Q2 2023 profit figure.

Both line items comfortably exceeded the consensus-analyst estimates. On average, prognosticators following Ross stock were anticipating total sales of $5.24 billion and net earnings per share (EPS) of $1.50.

Ross not only surprised analysts on the upside with its performance, it surprised itself. In the earnings release, the company quoted CEO Barbara Rentler as saying that "sales and earnings were above our expectations as our stronger value offerings resonated with our customers."

The retailer also provided updates about its dividend payouts and share-buyback program. The day before earnings were published, the company announced its board of directors declared the next quarterly dividend will match the two previous ones, at just under $0.37 per share. It is to be paid on Sept. 30 to investors of record as of Sept. 10. At the current share price, it would yield 0.9%.

As for the stock repurchases, Ross said that it bought 1.8 million shares of its common stock for $262 million. It added that it remains on course to repurchase a total of $1.05 billion over the entirety of 2024.

Management guides for notable full-year EPS gain

Ross also updated its second-half and full-year 2024 earnings guidance. For the latter period, the company is forecasting EPS of $6.00 to $6.13. The 2023 figure was $5.56.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .