11:25 AM EST, 03/06/2024 (MT Newswires) -- Ross Stores ( ROST ) better-than-expected fiscal Q4 earnings were due to topline and GM outperformance, Morgan Stanley said in a note to clients Wednesday.

The EPS beat was partially offset by rising selling, general and administrative costs, however, the report added.

Highlights of the quarter included underlying sales growth, current apparel category underperformance, fiscal Q4 GM reaching the highest level since 2017, and reducing the gap to its pre-Covid profitability levels, the report said.

The off-price apparel and home fashion chain reported fiscal Q4 earnings late Tuesday of $1.82 per diluted share and sales of $6.02 billion for the quarter ended Feb. 3.

Morgan Stanley raised Ross Stores' ( ROST ) price target to $161 from $155 and maintained its overweight rating on the stock.

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