Ross Stores Earned $1.04 per Share

After the bell, Ross Stores (ROST) reported fiscal Q2 earnings of $1.04 per share. That’s up from 82 cents per share last year. Sales were up 9%, and same-store sales were up 5%.

Barbara Rentler, Chief Executive Officer, commented, “We are pleased with the above-plan growth we delivered in both sales and earnings in the second quarter. Though better than expected, operating margin of 13.8% was down from last year as higher merchandise margin and leverage on occupancy and buying costs were more than offset by a combination of unfavorable timing of packaway-related expenses, higher freight costs, and this year’s wage investments.”

Ms. Rentler continued, “During the second quarter and first six months of fiscal 2018, we repurchased 3.2 million and 6.5 million shares of common stock, respectively, for an aggregate price of $273 million in the quarter and $529 million year-to-date. As planned, we expect to buy back a total of $1.075 billion in common stock during fiscal 2018.”

For Q3 and Q4, the company is aiming for same-store sales growth of 1% to 2%. For Q3, Ross sees EPS between 84 and 88 cents, and for Q4 between $1.02 and $1.07. That works out to full-year guidance of $4.01 to $4.10 per share.

Commenting on the Company’s future expansion prospects, Ms. Rentler said, “We are excited to announce that we have raised our long-term projected store potential to 3,000 locations, up from the previous target of 2,500. This is based on our research that indicates we can now further increase penetration in both existing and new markets. As a result, we believe that Ross Dress for Less can grow to about 2,400 locations across the country, up from our prior target of 2,000, and that dd’s DISCOUNTS can ultimately become a chain of approximately 600 stores, versus our previous projection of 500. This higher store potential provides us with a considerable amount of long-term growth opportunities given our current store base of 1,453 Ross Dress for Less and 227 dd’s DISCOUNTS.”

Posted by on August 23rd, 2018 at 4:10 pm


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