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NEW YORK — Ross Stores forecast annual sales above Wall Street estimates on Tuesday, betting demand for discounted apparel and accessories will hold up even as macroeconomic uncertainty looms.
Shares of the off-price retailer rose about 6% in after-hours trading after it also announced a new $2.55 billion share buyback program for fiscal 2026 and 2027.
Value-focused shoppers have been turning to off-price chains for branded goods at lower prices amid persistent inflation and uncertainty around trade policy, supporting steady store traffic.
Ross has been investing in marketing to attract demand in a highly competitive off-price market, and executives said on a post-earnings call it has also worked with vendors to navigate the impact of tariffs on categories such as home goods.
The California-based retailer faces competition from rivals such as TJX, Burlington Stores, fast-fashion chains such as Shein and digital marketplace Amazon, which are expanding their discount offerings.
Spend growth at off-price chains is among the strongest in retail, with gains across all income segments, recently led by lower-income shoppers but with solid growth from middle- and higher-income households as well, said Michael Gunther, SVP of research and market intelligence at ConsumerEdge.
Rival TJX last week forecast annual sales and profit below expectations, citing concerns over declining discretionary purchases as living costs rise.
Fourth quarter operating margin were 12.3% compared to last year's 12.4%.
For the holiday quarter, Ross's comparable sales rose 9%, beating analysts' estimate of a 4.03% rise, according to data compiled by LSEG.
It earned quarterly profit of $2 per share, topping estimates of $1.90 per share.
Ross expects annual same-store sales growth of 3% to 4%, compared with analysts' estimate of a 3.05% increase.
The company expects annual profit per share in the range of $7.02 to $7.36, missing average estimates' of $7.21.
