NEW YORK (AP) -- Shares of Ross Stores Inc. rose Thursday after the discount retailer said that it will likely surpass its profit forecast for the current quarter following better-than-expected March sales.
THE SPARK: For the five weeks through Saturday, Ross said its revenue at locations open at least a year rose 2 percent. The company had expected the metric to fall 1 to 2 percent, and analysts polled by Thomson Reuters predicted a decline of 1 percent.
Total sales for March rose 6 percent to $1.04 billion.
Because of the sales growth, Ross said it expects its net income for its fiscal first quarter, which ends May 4, to top its previous forecast of $1 to $1.04 per share. Analysts, on average, were expecting a profit of $1.04 per share, according to FactSet.
THE BIG PICTURE: Like other discounters, Ross has seen its sales rise in recent years, helped by continued economic uncertainty that has made shoppers more careful about their spending.
Also on Thursday, the company maintained its outlook for revenue at stores open at least a year to grow 5 to 6 percent in April.
THE ANALYSIS: Canaccord's Laura Champine backed her "Hold" rating for the stock, but boosted her price target by $1 to $66 in light of the better-than-expected sales.
Champine said that while Ross' high-quality offerings will appeal to value-focused shoppers, higher taxes will continue to pressure the company's core customers.
THE SHARES: Up $4.56, or 7.6 percent, to $64.79 in midday trading, after peaking at $65 earlier in the session. Over the past 52 weeks, the company's shares have traded between $52.01 and $70.82.
Since the beginning of this year, the company's shares have risen about 12 percent.
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