Ross Stores Climbs After Higher Forecast: San Francisco Mover

Ross Stores Inc. rose the most in more than three months after the retailer of discount designer wear said first-quarter profit will top a previous forecast.

The shares climbed 5.9 percent to $63.80 at the New York close, for the biggest gain since Jan. 3. The stock is up 18 percent this year, compared with a 12 percent gain for the Standard & Poor’s 500.

Profit per share in the current period will be “slightly above” an earlier prediction of $1 to $1.04 as comparable store sales rose 2 percent in the five weeks ended April 6, Pleasanton, California-based Ross said today. The company, which owns the Ross Dress for Less and Dd’s Discounts chains, had projected a decline of as much as 2 percent.

“Customer demand surpassed their historical averages,” Mark Montagna, a Nashville, Tennessee-based analyst at Avondale Partners LLC, said in a telephone interview. “There are continued execution opportunities going forward with store growth and expense leverage.”

Montagna has a “market outperform” rating on the shares and forecasts them to hit $66 within 12 months.

The increase in the latest period came amid the Easter holiday, when stores were shut, and atypical cold weather that kept some shoppers home, said Dutch Fox, an analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia. In the future, sales comparisons will be easier because the April 6 period was measured against a year-earlier gain of 10 percent, the biggest in 2012, he said.

“It has to make you more positive about the potential outlook for this company as we move through 2013,” Fox said in a telephone interview.

Ross reaffirmed its forecast of a 5 percent to 6 percent increase in April same-store sales. The metric is a key indicator of growth because it excludes new and closed stores.