06:40 AM EST, 11/22/2024 (MT Newswires) -- Ross Stores ( ROST ) shares advanced early Friday as the discount retailer lifted its full-year earnings outlook despite recording lower-than-expected fiscal third-quarter sales amid softening consumer discretionary spending.

The company now anticipates per-share earnings to be in a range of $6.10 to $6.17 for fiscal 2024, it said late Thursday, compared with previous projections for $6 to $6.13. The current consensus on FactSet is for GAAP EPS of $6.18. The stock climbed 7% in premarket activity.

"We remain confident that our ongoing focus and commitment to delivering the most compelling values possible will enable us to maximize our potential for profitable growth now and in the future," Chief Executive Barbara Rentler said in a statement. Rentler is set to be succeeded by former Boot Barn Holdings (BOOT) CEO Jim Conroy, effective Feb. 2.

For the three-month period ended Nov. 2, Ross Stores ( ROST ) reported earnings of $1.48 a share versus $1.33 the year before, topping the Street's view for $1.39. Sales amounted to $5.07 billion for the third quarter, up from $4.92 billion last year, but below the FactSet analysts' $5.15 billion estimate.

"We are disappointed with our third-quarter sales results as business slowed from the solid gains we reported in the first half of 2024," Rentler said. "Although our low-to-moderate income customers continue to face persistently high costs on necessities pressuring their discretionary spending, we believe we should have better executed some of our merchandising initiatives."

Comparable store sales increased 1%, missing the market's forecast for a 2.5% gain. Hurricanes Helene and Milton and "unseasonably warm temperatures" also weighed on comparable sales by about 1%, Rentler said during an earnings call, according to a FactSet transcript.

The company's operating margin improved 75 basis points year over year to 11.9%, as "lower incentives, freight and distribution costs more than offset the planned decline in merchandise margin," Rentler said. Total costs and expenses rose to $4.42 billion from $4.33 billion.

For the ongoing quarter, Ross Stores ( ROST ) now expects EPS to be in between $1.57 and $1.64, down from its prior outlook of $1.60 to $1.67. The Street is looking for $1.65. The new guidance range includes an approximate $0.03 hit from "the timing of packaway-related expenses that benefited the third quarter," according to Rentler.

The retailer continues to project comparable sales to rise by 2% to 3% for the fourth quarter, compared with analysts' expectations for growth of 2.3%.