Ross January Comps Decline 2%, Raises Q4 Guidance

Ross Stores, Inc. reported sales for the four weeks ended Jan. 31, 2009 of $365 million, a 4% increase over the $350 million in sales for the four weeks ended Feb. 2, 2008. Same store sales for the four weeks ended Jan. 31, 2009 declined 2% compared to the four weeks ended Feb. 2, 2008.
 
For the 13 weeks ended Jan. 31, 2009, sales were $1.734 billion, a 5% increase over the $1.652 billion in sales for the 13 weeks ended Feb. 2, 2008. Comparable store sales for the 13 weeks ended Jan. 31, 2009 decreased 1% compared to the 13 weeks ended Feb. 2, 2008.

For the 52 weeks ended Jan. 31, 2009, sales were $6.486 billion, a 9% increase over the $5.975 billion in sales for the 52 weeks ended Feb. 2, 2008. Comparable store sales for the 52 weeks ended Jan. 31, 2009 rose 2% over the 52 weeks ended Feb. 2, 2008.

Michael Balmuth, vice chairman, president and CEO, commented, “Both our January and fourth quarter sales were in line with our expectations. More importantly, merchandise gross margin for the fourth quarter was better than expected and up from last year. These results reflect the ongoing success of our core strategy of delivering compelling bargains, which have become increasingly important to today's value-focused consumer. Our aggressive inventory management has also been a key driver of improved profitability by promoting faster turns and lower markdowns.”

“Based on our sales and margin trends, we now estimate earnings per share for the 13 weeks ended January 31, 2009 of 75 cents to 76 cents, up from our previous guidance of 73 cents to 75 cents and 70 cents for the 13 weeks ended Feb. 2, 2008. For the 52 weeks ended Jan. 31, 2009, earnings per share are estimated to increase 22% to 23% to $2.32 to $2.33, up from $1.90 in the prior year,” said Balmuth.

Ross' Board of Directors recently approved a 16% increase in the quarterly cash dividend to 11 cents per common share, payable on Mar. 31, 2009 to stockholders of record as of Feb. 20, 2009.

In commenting, Mr. Balmuth said, “Our solid financial position and anticipated future cash flows allow us to continue to enhance stockholder returns through both our dividend and share repurchase programs. The higher dividend announced today represents the fifteenth consecutive annual increase since our dividend program was initiated in 1994. In addition, I am pleased to report that during 2008 we repurchased a total of 9.3 million shares of common stock for an aggregate purchase price of $300 million and expect to complete as planned the remaining $300 million repurchase authorization in 2009.”

Looking ahead, Balmuth said, “Considering today's very difficult macro-economic and retail climate, we remain cautious in our outlook as we enter 2009. Our experience over the past year reflects the benefit of setting prudent targets when planning the business with the hope that we can do better.”

For the fiscal year ending Jan. 30, 2010, the company is forecasting same store sales to decline 1% to 3% compared to a 2% gain in the prior year, and projecting earnings per share in the range of $2.25 to $2.45. For the 13 weeks ending May 2, 2009, comparable store sales also are forecast to decline 1% to 3% compared to a 3% gain in the prior year quarter. Earnings per share for the first quarter of 2009 are projected to be in the range of 56 cents to 61 cents, compared to 60 cents in the prior year period.”