Well it looks like the people of Walmart pulled through once again, Ross Stores just gave its investors a massive win as they just crushed earnings estimates. How bout dat?

(Source: Giphy) 

If that doesn’t tell you that prices are just too damn high, I don’t know what will. The “Dress for Less” fashion icon, who has experienced its own economic turmoil over the years, has come out winning as consumers reverted to low price clothing (think: Someone's used one-night stand shirt) instead of its overpriced name brand competitors in Q2. 

(Source: MarketBeat) 

This just adds fuel to the fire when it comes to Ross Stores’ streak over the past four quarters as it’s nailed EPS estimates by an average of +8.56% and revenue by +1.7% with the stock soaring +12.73% YTD. But when it comes to their latest earnings numbers combined with Ross’ year-over-year numbers, its clear momentum is surrounding this stock like fleas on a dawg. 

(Source: Giphy) 

For instance, Ross was definitely cashing checks and breaking necks in Q2 as their EPS slammed analysts estimates by an impressive +6.81% with a cool $1.59 per share (beating expectations of $1.49). Revenue also had its field day as Ross slapped analysts with a nice $5.29 billion, topping their $5.25 billion forecasts for a nice +0.77% beat.

Looking at the year-over-year numbers, Ross executives are screaming “LFG!” as revenue boomed +7.15% YoY, while net income, net profit margin, and operating income also ballooned +18.11%, +10.29%, and +18.22%. It’s also worth noting that diluted EPS (can’t forget the boring bond dudes), also skyrocketed +20.45% year-over-year.

(Source: IBD) 

So clearly as you can see, not only are Ross investors happy, but penny pinchers and back to school savers are definitely strutting their Ross purchases all over the country. For this reason, six different analysts from UBS, Wells Fargo, BMO Capital, among others immediately raised their price targets on Ross Stores post earnings - with Robert W. Baird and Loop Capital Markets leading the upgrades with new price targets of $190 and $180, indicating +22.2% and +15.85% upside from current levels.

(Source: Street Insider)

Now with that said, personally, this isn’t surprising to me at all. I know I threw a little shade at the people of Walmart at the beginning of this article, but for me… Ross is the GOAT. When I was a poor, clueless kid in college, Ross was what kept me from looking like the broke as a joke kid I really was - and given that everything from Trump’s toupe to the price of eggs is flying high these days, paying $100 bucks for back to school jeans just ain’t worth it. 

(Source: Giphy) 

And obviously, not only does the mass majority of consumers agree, but for you price action traders - Ross’ technical’s are also following Wall Street’s bullish sentiment. For example, all 17 of our indicators at Stocks.News are flashing “Strong Buy” for Ross as all 15 moving averages are indicating more uptrend continuation. 

On the other hand though, while most investors are basking in this massive win, it’s also worth noting that even though Ross’ guidance expects Q3 earnings to range from $1.35 to $1.41 per share (up from $1.33 last year), the fourth quarter projections are lagging compared to Wall Street. In short, Ross forecasts earnings to settle around $1.60 to $1.67 compared to analysts expectations of $1.68 per share.

Now obviously, this is definitely not a make or break for Ross, as the company is absolutely crushing it right now, but with the Fed set to lower interest rates, giving consumers a bit more room to breathe - discretionary income could rise as momentum to purchase better name branded items comes back to mind. 

(Source: Imgflip)

But like I said, guidance is what it sounds like - guidance (aka imaginary numbers that are about as unpredictable as a fart in a fan factory), so for you investors that look for every little detail on whether a stock is worth your attention or not, I’d take guidance with a grain of salt. Especially since the cold hard numbers are that revenue, earnings, and operating income for the company are popping a cap in bearish sentiment.  

Now of course, do what you will with that information and regardless of how great the financials and technicals of the company look, please act accordingly. Because like I always say, I’m just giving you the numbers and the story, not investing advice - especially considering my think so’s are about as useless as a screen door on a submarine. (Ask my wife). 

(Source: Giphy)

But given that the stock is heating up +12.73% YTD, +10.15% over the past month, and up +5.29% over the past five days, Ross Stores are definitely flying high… and that simply should not go unnoticed.

As always, stay safe and stay frosty on this beautiful Monday! Until next time… 

Stocks.News holds positions in Walmart as mentioned in the article.