What do you call it when a company does its best to make things seem like they are not all bright and cheerful? Well you might just call that being prudent and smart. You might also call that foolish in the short-term. This is one of those things that can make a lot of sense to do in the long run but may make a company look bad in the here and now. That is how it has been for Ross Stores anyway.
CNBC reports that shares of the company fell pretty sharply following its latest earnings call on Friday. The company has a known track record for being conservative with its forward guidance as it were. However, they are frequently known to post quarterly earnings beats.
What happened recently was that the company posted a nine percent beat on revenue and operating expenses that were relatively the same as the year prior. However, they also put out rough guidance for the fourth quarter, and this seemed to be what so much of the market got focused on. No one wanted to hold the shares as the company had reported such dismal numbers going forward. That is just part of the nature of the company though.
Many believe that Ross Stores actually will do better with its earnings than what people are giving it credit for as of right now. They just have a tendency to tell the public that they are not going to do as great in the hopes that they set the bar low enough that they can hop right over it when they report their actual earnings.
The company appeals to many of those who want to get a good bargain on clothing that is still respectable looking. In other words, there are some out there who would like to dress well without paying the full price tag that it costs to do this in most stores. Ross Stores gives them the opportunity to do exactly that.
As of right now, it seems that Ross Stores could be a good candidate for millennials to get all excited about. It does seem to fit right into the construct of the kind of place that this younger group might like to shop at. That being said, there are definitely some doubts as to what is going to happen with the future of this company going forward. This may be a good candidate for wait and see.