Off-price retailer, Ross Stores Inc. ROST declared a 2-for-1 stock split in order to control the rise in its share price. The company’s share price has been rising over the past few years based on its strong and sustained financial performance.
Per the terms of the split, the company will issue one more share against each share held by an investor. These will be paid as a 100% stock dividend on Jun 11 to shareholders of record on Apr 22.
Stock splits generally increase the number of shares outstanding while maintaining the company’s market capitalization and lowering the share price proportionately. However, a lower priced stock on a per-share basis helps attract a wider range of buyers, thus increasing the traded volumes.
Coming back to Ross Stores, earlier the company had split its shares in a 2-for-1 ratio in Dec 2011. These stock splits reflect the company’s growth potential and its commitment to enhance shareholder value.
Among its shareholder-friendly moves, the company recently hiked its quarterly cash dividend by 18% to 23.5 cents a share, payable on Mar 31, 2015, to shareholders of record as on Mar 9. Further, the company bought back 7.4 million shares for about $550 million during fiscal 2014. These moves not only underscore Ross Stores’ solid financial status but also reflect management’s confidence in its future prospects.
Additionally, Ross Stores announced a new program, authorizing the repurchase of nearly $1.4 million shares by fiscal 2016.
Further, this Zacks Rank #2 (Buy) company ended fiscal 2014 on a spectacular note, with better-than-expected top and bottom-line results for both fourth quarter and fiscal 2014. Backed by robust sales and merchandise margins, quarterly earnings surged 17.6% year over year to $1.20 per share. The bottom line came in much ahead of the guided range of $1.05–$1.09 and the Zacks Consensus Estimate of $1.11 per share.
Total sales advanced 10.6% to $3,032.7 million backed by positive response from value-focused customers toward the company’s extensive collection of brand bargains. Sales also cruised ahead of the Zacks Consensus Estimate of $2,933 million.
Other stocks worth considering in the retail-discount space include Gordmans Stores Inc. GMAN with a Zacks Rank #1 (Strong Buy), Burlington Stores Inc. BURL and Fred’s Inc. FRED both carrying a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment