Ross Stores Inc. lifted its outlook for the year after posting healthy third-quarter results. Same-store sales in the quarter ended November 2 grew 14 percent against the 2019 third quarter.
Ross Stores Inc. reported earnings per share for the third quarter ended October 30, 2021 of $1.09 on net income of $385 million. This compares to $1.03 per share on net earnings of $371 million for the 13 weeks ended November 2, 2019. Sales rose 19 percent to $4.6 billion on a two-year basis.
Ross Stores had forecast third-quarter same-store sales to be up 5 percent to 7 percent with earnings per share in the range of $0.61 to $0.69.
For the nine months ended October 30, 2021, earnings per share were $3.82 on net earnings of $1.4 billion, up from $3.32 per share on net income of $1.2 billion for the same period in 2019. Sales year-to-date rose 20 percent to $13.9 billion, with comparable-store sales up 14 percent.
Barbara Rentler, CEO, commented, “Third quarter sales and profitability significantly exceeded our expectations as consumers continued to respond favorably to our broad assortment of great bargains. We achieved these results despite waning government stimulus and uncertainty related to the spread of COVID variants. Operating margin of 11.4 percent was better than plan, though down from 2019 as leverage from the robust sales gains was partially offset by ongoing headwinds from higher freight, wage, and COVID-related costs.”
Rentler continued, “During the third quarter and first nine months of fiscal 2021, we repurchased 2.1 million and 3.5 million shares of common stock, respectively, for an aggregate cost of $241 million in the quarter and $417 million year-to-date. We remain on track to buy back a total of $650 million in common stock during fiscal 2021.”
Looking ahead, Rentler said, “While we are encouraged by the ongoing strength of consumer demand, there remains significant uncertainty related to the worsening industry-wide supply chain congestion as we enter the important holiday season. As a result, and while we hope to do better, we are projecting fourth-quarter comparable-store sales gains of 7 percent to 9 percent and earnings per share in the range of $0.83 to $0.93.”
Rentler added, “Based on our year-to-date results and our updated fourth-quarter guidance, we are now planning earnings per share for fiscal 2021 to be in the range of $4.65 to $4.75 on a comparable store sales gain of 12 percent to 13 percent.”
Previously, Ross Stores’ guidance called for earnings per share forecast to be in the range of $4.20 to $4.38 on a comparable store sales gain of 10 percent to 11 percent.
Rentler concluded, “Moving forward, consumers’ increasing focus on value and convenience along with a large number of recent retail closures and bankruptcies make us confident about our prospects for continued market share gains in the future.”
