Ross Earnings: Solid Sales, Margins Suggest Company Is Benefitting From Consumers’ Value Orientation

Our $103 per share valuation of narrow-moat Ross should not change much after it announced first-quarter results that met our expectations. With the company’s flexibility and value orientation resonating as expected with consumers, we see little reason to change our long-term targets (mid-single-digit top line growth rates against low-double-digit operating margins). With the shares trading near our valuation, we suggest prospective investors seek a larger margin of safety before building a position.