Ross Stores (ROST), the California-based retailer before their second quarter earnings on Thursday after the market closed at 4 p.m.

The immediate reaction needed no explanation, as the shares exploded higher and closed up 11.76% or up $6.27 at $59.60. Shares had closed the regular session at $53.33 which was down -$1.04 or -1.19%.

Shares have traded in a 52-week range from a low of $52.85 to a high of $69.81. When shares open up for trading on Friday they will likely open in the $60 area-and, depending on the liquidity and demand, shares can accelerate much higher, level off, or even drift lower if profit-taking ensues.

Given the fact that Ross offers a decent dividend of 1.18% yearly, it makes sense that there may be additional demand for shares because many investors are seeking the highest returns for their Investments when they invest in stocks.

Ross Stores Numbers

Earnings came in at $0.82 per share which compares with $.71 cents per share in the same quarter last year. Net earnings were $317 million dollars, and this compares with $282 million dollars in the prior year’s same period.

Sales overall showed a +8% increase and possibly the biggest impact came from same-store sales growth

Company Comments

Barbara Rentler, Chief Executive Officer, commented,

“We are pleased with the better-than-expected growth we delivered in both sales and earnings in the second quarter, especially given our strong multi-year comparisons and today’s volatile retail climate. Operating margin of 14.9% outperformed our projections, mainly due to a combination of higher merchandise margin and leverage on our above-plan sales gains. During the second quarter and first six months of fiscal 2017, we repurchased 3.6 million and 6.9 million shares of common stock, respectively, for an aggregate price of $215 million in the quarter and $430 million year-to-date. As planned, we expect to buy back a total of $875 million in common stock during fiscal 2017 under the two-year $1.75 billion authorization approved by our Board of Directors in February of this year. For the third quarter ending October 28, 2017, we are forecasting a same store sales gain of 1% to 2% on top of a robust 7% increase in the prior year. Earnings per share for the period are projected to be $.64 to $.67, up from $.62 in last year’s third quarter.”

The Charts

(Click on image to enlarge)

The above price chart shows the daily action going back three months. it is easy to see how the shares have respected and upper red resistance line and they lower green support line. The green oval area on the right side shows where the stock will likely open in the morning for Friday Trading.

(Click on image to enlarge)

The above price chart is the intraday price action on the left and the after hour trading session on the right in the shaded area. It is clearly visible the moment earnings were announced and the price rocketed higher.

Afterward, it leveled off in a basing price action on the five-minute time frame. It will be interesting to watch how shares trade during the course of the day as many other retail names have come out with their earnings and have seen mixed reactions and volatile trading.