Ross Stores Earns 98 Cents per Share

Ross Stores‘s (ROST) Q4 earnings are out. The company made $1.19 per share, and 21 cents of that was due to tax reform. Let’s say it’s 98 cents per share on a continuing basis.

Earlier, Ross said they were looking for 88 to 92 cents per share. The consensus on Wall Street was for 93 cents. I said I was expecting 95 cents per share.

For the year, Ross made $3.55 per share. This was a 53-week fiscal year. The company said the extra week added 10 cents per share. Same store sales rose by 4% on the year.

Barbara Rentler, Chief Executive Officer, commented, “Despite our own difficult multi-year comparisons and a very competitive retail climate, sales and earnings were well ahead of our expectations for both the fourth quarter and the full year. We are pleased with these results, which reflect our ongoing success in delivering broad assortments of compelling bargains to today’s value-driven shoppers.”

Ms. Rentler continued, “Fourth quarter operating margin grew 95 basis points to 14.6%, up from 13.6% in the prior year. This improvement was driven by a combination of strong merchandise margin, expense leverage from solid gains in same store sales, and the impact of the 53rd week. For the 2017 fiscal year, operating margin increased 50 basis points to a record 14.5%.”

Ross is raising its dividend by 41% to 22.5 cents per share from 16 cents per share. I thought I was optimistic with 20 cents per share. Ross has raised its dividend every year since 1994.

The company is also adding $200 million to their buyback program. The authorization is now up to $1.075 billion.

Now for guidance. Ross projects earnings this year to range between $3.86 and $4.03 per share. The CEO said they’re taking a “prudent approach to forecasting.” For Q1, Ross sees earnings between $1.03 and $1.07 per share.

Update: The shares are down about 3% after hours. Some news sources are saying the results are disappointing. Not to me! We’ll see what happens in tomorrow’s session.

Posted by on March 6th, 2018 at 4:10 pm


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