Ross Stores Beats Earnings and Hikes Dividend

Ross Stores (ROST) reported fiscal Q4 earnings of $1.28 per share. This is for the months of November, December and January. Previously, Ross had given us a range of $1.20 to $1.25 per share.

Same-store sales rose by 4%. Ross has been expecting growth of 1% to 2%. For the year, Ross made $4.60 per share. That’s up from $4.26 in 2018. Annual sales rose 7% to $16.0 billion

Barbara Rentler, Chief Executive Officer, commented, “We delivered strong sales and earnings growth for both the fourth quarter and fiscal year. Our ongoing ability to offer compelling bargains to our customers enabled us to achieve these results despite our own challenging multi-year comparisons and a fiercely competitive holiday season.”

Ms. Rentler continued, “Fourth quarter operating margin of 13.3% was slightly better than expected, driven by higher merchandise margin.”

During Q4, Ross bought back 2.7 million shares for $309 million. For the year, they bought back 12.3 million shares for $1.275 billion. There’s $1.275 billion left in the current authorization

Ross is also raising its quarterly dividend 12%, from 25.5 cents to 28.5 cents per share. The new dividend is payable on March 31 to stockholders of record as of March 17. Ross has raised its dividend every year since 1994.

Now for guidance:

For the 52 weeks ending January 30, 2021, the Company is planning same store sales to grow 1% to 2% and earnings per share of $4.67 to $4.88. We also plan to open about 100 stores this year, consisting of approximately 75 Ross Dress for Less and 25 dd’s DISCOUNTS locations.

For the first quarter ending May 2, 2020, comparable store sales are forecast to be up 1% to 2% with earnings per share projected to be $1.16 to $1.21 versus $1.15 for the first quarter ended May 4, 2019.

Wall Street had been expecting $1.25 per share for Q1 and $5.01 per share for the year. The shares are down about 3% after hours.

Posted by on March 3rd, 2020 at 5:41 pm


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