Shares of Ross Stores got a marginal boost in the extended trade on Thursday after the discount retailer reported a surprise profit for 2Q despite its stores remaining closed for one-fourth of the quarter.

Ross Stores (ROST) reported earnings per share of $0.06 that surpassed analysts’ expectations of a loss per share of $0.28. The company’s 2Q revenues of $2.7 billion also beat Street estimates of $2.5 billion. The company revealed that it began store reopening in a phased manner from May 14 and on average, its overall stores were open for 75% of the quarter. On a year-over-year basis, top and bottom lines plunged 32.5% and 94.7%, respectively.

The off-price retailer’s CEO Barbara Rentler said, “Our operating margin for the period reflects the deleveraging effect from lower sales as our stores were only open on average for 75% of the quarter, and on the comparable store sales decline. Additional headwinds included COVID-19 related expenses and unfavorable timing of packaway-related costs.” (See ROST stock analysis on TipRanks).

On August 17, Telsey Advisory analyst Dana Telsey upgraded the stock to Buy from Hold on encouraging post-pandemic opportunities for Ross Stores. Telsey said that “Ross Stores’ cautious approach to running its business and strong financial position” will help it weather through the COVID-19 pandemic.

She also said that “a wide door of market share opportunities arise from the reopening of its retail stores across the U.S. and bankruptcies of department and specialty stores.” Telsey reaffirmed the price target of $112 (28.1% upside potential) on the stock.

Overall, the Street has a bullish Strong Buy consensus on Ross Stores. With shares down about 25% so far this year, the average analyst price target of $103.50 implies an upside potential of just over 18%.

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