April 13, 2018

ROST – Market expectations are for record high Uniform ROA, but management has concerns about costs and guidance


      • Ross Stores, Inc. (ROST:USA)currently trades near all-time highs relative to UAFRS-based (Uniform) Earnings, with a 22.0x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about costs and guidance
      • Specifically, management may be concerned about the impact of increasing diesel prices, and may be downplaying concerns about wage rate increases. Additionally, they may be downplaying concerns about their guidance, and may lack confidence in the sustainability of abundant off-price merchandise availability going forward
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