Ross Stores Earns 67 Cents per Share

After the close, Ross Stores (ROST) reported fiscal Q4 earnings of 67 cents per share. This is for the crucial holiday-selling months of November, December and January. Wall Street had been expecting earnings of $1 per share. Sales were $4.2 billion. Same-store sales fell 6%.

For the year, Ross made 78 cents per share. Total sales were $12.5 billion.

Barbara Rentler, Chief Executive Officer, commented, “While our fourth quarter sales exceeded our expectations, the upsurge of the virus resulted in lower traffic, especially in California, our largest state, where we were subject to more stringent occupancy and operating hour restrictions.”

Ms. Rentler continued, “Fourth quarter operating margin of 9.5% declined versus last year as an increase in merchandise margin was more than offset by the deleveraging effect on expenses from lower sales, and higher supply chain and COVID-related operating costs.”

Now for some good news. Ross is reinstating its quarterly dividend of 28.5 cents per share. One year ago tomorrow, Ross raised its quarterly dividend 12%, from 25.5 cents to 28.5 cents per share.

For Q1 guidance:

Ms. Rentler continued, “Comparable store sales for the 13 weeks ending May 1, 2021 are projected to be down 1% to down 5% compared to the 13 weeks ended May 4, 2019. Earnings per share for the 2021 first quarter are forecast to be $0.74 to $0.86, reflecting the deleveraging effect from the projected decline in same store sales, increased supply chain costs, higher wages, and ongoing COVID-related expenses.”

Wall Street had been expecting 89 cents per share for Q1.

Ms. Rentler said that they plan to open 60 new locations this year (about 40 Ross Dress for Less and 20 dd’s Discounts.) She also said that Ross is well positioned to gain market share since so many retailers have gone under during the lockdowns.

Posted by on March 2nd, 2021 at 4:11 pm


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