By Neil J Kanatt
(Reuters) -Ross Stores raised its annual profit forecast on Thursday, betting on resilient demand for its discounted apparel and accessories ahead of the holiday season amid looming macroeconomic uncertainties.
Shares of the company, which also beat estimates for third-quarter sales, were up about 3% in after-market trading.
Off-price retailers such as Ross Stores have been attracting budget-conscious customers as shoppers increasingly seek branded goods at lower prices due to persistent inflation and volatile trade policy.
“Core value shopper remained resilient despite lapsed SNAP benefits and broader tariff uncertainty weighing on household budgets,” said eMarketer analyst Suzy Davidkhanian.
Rival TJX also raised its annual profit target on Wednesday, helped by strong demand for discounted apparel and home furnishings.
Ross Stores expects annual earnings per share in the range of $6.38 to $6.46, compared to its previous expectations of between $6.08 and $6.21.
Its third-quarter sales of $5.6 billion beat estimates of $5.42 billion, according to data compiled by LSEG.
Comparable sales rose 7% in the quarter.
The company expects fourth-quarter profit of $1.77 to $1.85 per share, compared to its previous estimates of between $1.74 and $1.81. It also expects the holiday quarter same-store sales to rise 3% to 4%, up from its previous 2% to 3% growth forecast.
“Holiday gifting may still skew toward essentials for this shopper, but the quarter underscores that the lower-income consumer is holding up better than many feared,” Davidkhanian added.
(Reporting by Anshi Sancheti and Neil J Kanatt in Bengaluru; Editing by Alan Barona)
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