A Preview Of Ross Stores's Earnings

Ross Stores ROST will be releasing its next round of earnings this Thursday, May 20. For all of the relevant information, here is your guide for Thursday's Q1 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Analysts expect Ross Stores earnings of $0.88 per share. Revenue will likely be around $3.87 billion, according to the consensus estimate. Ross Stores's loss in the same period a year ago was $0.29 per share. Quarterly sales came in at $1.84 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street consensus estimate for earnings would represent a 403.45% increase for the company. Sales would be up 109.98% from the year-ago period. The company's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Ross Stores were trading at $124.81 as of May 18. Over the last 52-week period, shares are up 26.3%. Given that these returns are generally positive, long-term shareholders should be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Ross Stores is scheduled to hold the call at 16:15:00 ET and can be accessed here.