Well I guess I would just counter that with the comment that I hope you are not saying that the only hope for ROST to gain $ market share in the overall apparel industry in the USA is to take customers from TJX.
Directly, indirectly..........doesn't really matter much to me as a shareholder. I think you were on the right track previously when you were stressing the importance of average wage growth (or lack thereof).
of which 1,146 were Ross locations in 33 states, the District of Columbia and Guam.
Yeah I think they compete to some extent, sure. They both are in the apparel business, although Ross doesn't compete overseas or in online sales. When people decide they need to save money but that "hmmm I guess I still need clothing", they might tend to defect to off price discount stores.
When you are doing a valuation study it is common practice to compare to other companies in the same industry, of similar market caps.
The Gap, Inc. (Gap Inc.),is a global specialty apparel company. Gap Inc. offers apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brands. The Company operates in two segments: Stores, which includes the operations of the retail stores for Gap, Old Navy, and Banana Republic, and Direct, which includes the operations for its online brands, both domestic and international. It has Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, China, and Italy. It also has franchise agreements with unaffiliated franchisees to operate Gap and Banana Republic stores. Under these agreements, third parties operate or will operate stores that sell apparel and related products under its brand names. In February 2014, GAP Inc announced the Old Navy's opening of the brand's first store in China.
Ross Stores, Inc. is an off-price apparel and home fashion chain in the United States. The Company operates two brands of off-price retail apparel and home fashion stores: Ross Dress for Less (Ross) and dd’s DISCOUNTS. Ross offers designer apparel, accessories, footwear, and home fashions for the entire family at everyday savings of 20% to 60% off department and specialty store regular prices. Its merchandise offerings also include, but are not limited to, small furniture and furniture accents, educational toys and games, luggage, gourmet food and cookware, watches, and sporting goods. As of February 1, 2014, it operated 130 dd’s DISCOUNTS stores in 10 states that features brand apparel, accessories, footwear, and home fashions for the entire family at everyday savings of 20% to 70% off moderate department and discount store regular prices. At February 1, 2014, it operated a total of 1,276 stores, of which 1,146 were Ro
keep saying all day that Morgan Stanley trimmed their position by 1%. The truth is they trimmed their portfolio weighting on AAPL from 4% to 3% and that is a 25% trimming of their total position. CNBC reporters can't even do math at the remedial level. They also advised their clients to do the same.
PS: I know that it is a 1percentage point trimming but what really matters is what percentage of their position they sold.
And the market obviously agrees with you judging by the nice pops in LUX, JWN, LB, ROST, GPS, KSS, M, TJX, etc. All were up around 2% today.
By the way, since ROST is actually in the index Nasdaq Global Select, an argument could be made that it is better to compare its performance to that index rather then the S&P500 like I did previously. That would mean that ROST is still underperforming its own index even at it's intraday high today since 10/8/13 (+13 mos trailing): NQGS +30.6%, ROST +28.6%, S&P500 +25.3%.
That means there could be some more upside even after the pop today. According to Thomson Reuters stock report on 11/27, 21 analysts have a mean price target of $91, high of $101 and some clown analyst way out on a limb at a low of $73 (LOL).
I just looked at the combined industries of Apparel and Dept Stores and reduced it to the 8 large caps (market cap $10B), which is the symbols: LUX, JWN, LB, ROST, GPS, KSS, M, TJX. I did this so as to not be comparing apples with oranges. Within this group, the unweighted avgs for P/E, Forward P/E, and PEG are: 20.84, 17.54, 1.94. The market cap weighted avgs are: 21.72, 18.08, 1.96. ROST (mcap $18.74B) P/E of 21.67 vs 21.72, Forward P/E of 18.88 vs 18.08, and PEG of 1.87 vs 1.96 does NOT support a thesis of the stock being overvalued, in fact quite the contrary.
A few negative nellies like someone on seeking alpha (probably the Canaccord Genuity analyst in desperation) are talking a lot about the big run up that ROST has made recently, but they fail to point out that the stock is only pretty much trading in line with the S&P500 on a trailing 14 mos. basis, which is a reasonable starting point since it nullifies the slight run up relative to the market that it made in the 2 mos. prior to the Q3 '13 earnings release. In other words, the recent run up in the stock is simply a correction, and the market is not being stupid or overly exuberant.
PS: The Russell 2000 is looking like it may want to make a run for it and if it does that could very well bode well for the overall market in the near term. Small caps generally lead the market up or down.
jack - check out the recent seekingalpha article "A Few Reasons Why Ross Stores Can Get Better After Third Quarter Earnings". The author makes some good points. Forward P/E is reasonable at 18.9 and falls below industry average. I think they are sandbagging for Q4 and in the CC they fell just short of admitting they were. Weak wage growth is a plus for an off price apparel store because more and more people will be joining the ranks of discount seekers and apparel is more of a necessity than a luxury. Ross Stores is doing it better than the competition like Kohls and they are expanding into new regions. Their management knows how to handle the analysts in a CC too and they won't give them any information that is subject to twisting to make look bad. They know the analysts are not their friends and I like that.
They are expanding into new regions (+6% store count in Q3) and are taking market share. Just look at the Gap dissapointing same store sales and Revenue and guidance reduction.
Sales are accelerating :
Q1 '14: +5.5% y/y
Q2 '14: +7.1% y/y
Q3 '14: +8.8% y/y
This was not done at the expense of Operating Margin, since this increased by 55 basis points or +4.9% y/y in Q3.
PS: eat me Cannacord Genuity. Nice try at manipulating the stock before earnings. Why isn't there a quiet period for these schmucks?
Comparable same store sales were up +4% in Q3 vs only +2% in Q2, which is an acceleration. Store count was up +6%.
The Gap's (GPS) reduction in forward guidance and disappointing earnings may indicate that they are losing share to ROST.
An extreme result tomorrow could be an intraday low of around $39 imo, based upon Dec '12 low and bottom of a 1-2-3 descending parallel channel. That'd be a great scalp if it happens. I'm not sure how to model the forward earnings at this point to determine a good investment price.
Well they were smart not to do any buybacks, in light of the fact that they seriously missed this quarter. They probably knew that much better bargains were coming. Why run the stock price up prior to a bad earnings report and pay too much to boot? It's too bad they overstuffed the channel with expensive guns. I believe that prevented their dealer and retailer network from being able to discount to any comparable extent to the competition, at least not without a rebate from the company.
Again, the press release clearly states that the aggressive price discounting of many of their competitors was not matched by Ruger. The main drivers of the reduced operating margins were:
1) reduced sales of firearms and firearms accessories,
2) the de-leveraging of fixed costs, including depreciation, indirect labor, engineering, and product development costs,
3) approximately $2 million of increased depreciation expense due to the reduction in the estimated useful lives of the Company’s capital assets, and
4) approximately $2 million of increased depreciation expense due to the $151 million of capital equipment purchases as the Company increased firearm sales from $144 million in 2007 to $679 million in 2013.
If you read the press release you'd know that they DIDN'T discount, even though their competitors did heavily. Perhaps that was a mistake in the short term. Or maybe they want the stock to get slammed so they can buy back shares at ridiculously low prices.
The overall industry consumer market was only down 3%, meaning they lost a lot of market share in the short term.
LOL jack you have always given this beefstu clown way more attention than he deserves. He obviously operates on the principle of "better to remain silent and to be thought a sage than to open your mouth and forever remove all doubt". That's why the guy can never make a relevant comment to the actual operations of the company, only what we can all see which is the share price.
Keep up the thoughtful posts.