Ross Stores two-for-one split: a nod to smaller investors

Ross Stores Inc. announced on Tuesday a two-for-one split of its common stock. The split will be paid in the form of a stock dividend on June 11 to shareholders of record on April 22. The discount apparel retailer nods thus to its smaller investors by the time it capitalizes on positive sentiment.

"Our decision to split the stock reflects both the Board of Directors' and management's ongoing confidence in the Company's future growth prospects and our continued commitment to enhancing stockholder value," explained Ross Stores in a note.

As argued by many in the market, one of the main reasons to opt for a stock split as this is to increase the stock's liquidity by means of putting an increased number of outstanding shares out in the market.

The discount apparel retailer's stock closed Monday at 106.38 dollars, just below its record closing high of 107.46 dollars reached Friday.

Ross Stores has a 1-year low of 61.83 dollars and a 1-year high of 108.17 dollars, what gives the company a market cap of 21.76 billion dollars.

"We have delivered solid and consistent financial performance over the past few years which has contributed to significant stock price appreciation over this period," said chief executive Barbara Rentler.

Prior to this stock split, the apparel retailer enacted a 2-for-1 stock split on December, 16, 2011, after the stock closed the day before at a pre-split price of 92.82 dollars.

It is worthy to remember that Ross Stores (NASDAQ:ROST) last issued its quarterly earnings on February, 26. Back then, the apparel group reported 1.20 dollars earnings per share (EPS) for the quarter, easily ahead the analysts’ consensus estimate of 1.11 dollars and noticeably better than last year’s same quarter’s 1.02 dollars EPS.

Likewise, the company’s revenue came in higher than expected, at 3.03 billion dollars for the quarter, compared to the consensus estimate of 2.93 billion dollars.

On average, analysts predict that Ross Stores will post 4.84 dollars earnings per share for the current fiscal year.