Jim Cramer Revealed Why Ross Stores, Inc. (NASDAQ:ROST) Is “Kicking Butt”
Jim Cramer praised Ross Stores (ROST) for its strong performance, citing 13% revenue growth and 10% same-store sales growth in Q2. ROST shares are up 25% YTD, while TJX (TJX) shares are down 4%. ROST guided FY EPS of $8.61-$8.77, but faces inventory and cost challenges. TJX reported weaker Q2 sales and tight Q3 margin guidance.
How this was made
The 30-second read
Why it matters
Ross's strong guidance may attract growth-oriented investors; TJX's slower growth could prompt defensive positioning.
Market read
Earnings and guidance for two major off-price retailers provide clear trading signals for both stocks.
What to watch
Potential impact of rising freight costs on margins and inventory turnover.
Background
Jim Cramer highlighted Ross Stores' earnings beat and growth, while noting challenges for TJX.
Ticker impact
Ross Stores reported Q2 revenue up 13% and guided FY EPS $8.61-$8.77, indicating strong growth.
Potential price rally on earnings beat and guidance raise.
Guidance implies 32-35% EPS growth, well above prior expectations.
TJX disclosed Q2 comparable sales +4% and Q3 margin guidance 11.8%-11.9%, highlighting slower growth.
Possible short-term downside pressure.
Margin guidance is narrow and sales growth is slowing, raising concerns.
Market effects
Off-price retail sector may see renewed investor interest from Ross's strong performance.
U.S. retail stocks could react to the contrasting results of Ross and TJX.
Limited to U.S. consumer discretionary investors.
Counterpoint
Higher inventories and fuel cost exposure could limit Ross's upside if inflation eases.
Key entities
- companyRoss Stores, Inc.
Off-price retailer reporting strong Q2 results and upbeat FY guidance.
- companyThe TJX Companies, Inc.
Off-price retailer reporting modest Q2 growth and tight margin guidance.
