Ross Stores Inc., a seller of discount clothes and home accessories, suffered its biggest stock decline in almost seven years after the retailer’s forecast disappointed investors.
Ross predicted annual profit of $2.40 to $2.45 a share, excluding some items, when it posted its latest quarterly results on Thursday afternoon. Analysts had estimated earnings at the top end of that range, according to data compiled by Bloomberg.
Ross Chief Executive Officer Barbara Rentler expects competitors to rely heavily on discounts this fall, potentially weighing on earnings. More retailers also are getting into the off-price market. Macy’s Inc., for instance, is testing a value-focused offshoot.
“The macroeconomic environment remains uncertain,” Rentler said on a conference call. “While we hope to do better, we believe it is prudent to remain cautious in forecasting our business for the second half.”
The stock fell 9.5 percent to $50 at the close of trading in New York, the biggest decline since October 2008. Shares of the Dublin, California-based chain had been up 17 percent this year through Thursday’s close.