Ross Stores (ROST +1%) saw a modest increase after its Q4 report, which largely met expectations when excluding a gain from selling a packaway facility. Comps reached the high end of guidance, but disappointing Q1 and full-year guidance overshadowed the results. A 10% dividend increase was announced, yet the overall report was underwhelming. New CEO Jim Conroy, who took charge on February 2, faces significant challenges ahead.
The modest stock increase, despite weak guidance, suggests investors anticipated a cautious outlook, similar to recent guidance from Walmart (WMT, Financial) and Target (TGT, Financial). Off-price peer TJX also provided lackluster guidance last week. Additionally, ROST shares had already declined from $153 to $136 in February, likely pricing in much of the negative outlook.
Another off-price competitor, Burlington (BURL, Financial), will report before the market opens tomorrow. Weak guidance is expected, though Burlington's sensitivity to weather may offer a silver lining. Formerly known as Burlington Coat Factory, outerwear remains a significant part of its sales, and February's cold weather could positively impact its guidance.
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