Ross Stores Inc. raised its outlook for the full year after reporting third-quarter results that came in well ahead of its guidance.

Earnings per share for the third quarter ended October 29, 2022 were $1.00 on net income of $342 million. These results compare to earnings per share of $1.09 on net income of $385 million for the 13 weeks ended October 30, 2021. Sales for the 2022 third quarter were $4.6 billion, in line with the prior year, with comparable store sales down 3 percent on top of a robust 14 percent gain for the same period in 2021.

Ross Stores had projected same-store sales would decline in the range 7 percent to 9 percent in the third quarter with EPS coming in between 72 cents and 83 cents.

For the nine months ended October 29, 2022, earnings per share were $3.08 on net earnings of $1.1 billion, versus $3.82 per share on net income of $1.4 billion for the same year-to-date period in 2021. Sales for the first nine months of 2022 were $13.5 billion, with comparable store sales down 5 percent on top of a strong 14 percent increase last year.

Barbara Rentler, Chief Executive Officer, commented, “Third quarter results were above our expectations as we delivered stronger values throughout our stores. Operating margin for the period was 9.8 percent versus 11.4 percent last year, reflecting the deleveraging effect from the comparable sales decline as well as pressure from higher markdowns and unfavorable timing of packaway-related costs.”

Rentler added, “During the third quarter, we repurchased 2.8 million shares of common stock for an aggregate price of $244 million. We remain on track to buy back a total of $950 million in common stock during fiscal 2022 under our two-year $1.9 billion repurchase program that extends through fiscal 2023.”

Fourth Quarter and Fiscal 2022 Guidance

Looking ahead, Rentler said, “We continue to expect a very promotional holiday selling season and ongoing inflationary headwinds to pressure our low-to-moderate income customers. That said, we face our easiest sales and earnings comparisons in the fourth quarter and are raising our guidance given our third quarter sales momentum and improved holiday assortments.”

Rentler continued, “We now expect fourth quarter same-store sales to be flat to down 2 percent on top of a 9 percent gain in the prior year, with earnings per share forecasted to be in the range of $1.13 to $1.26. Based on our year-to-date results and our fourth quarter forecast, earnings per share for fiscal 2022 are now projected to be in the range of $4.21 to $4.34 versus $4.87 last year.”

Previously, same-store sales for the fourth quarter were forecast to be down 4 percent to 7 percent with earnings in the range of $1.04 to $1.21. Previously, full-year EPS was projected in the range of $3.84 to $4.12.

Rentler concluded, “There remains a high level of uncertainty in today’s macroeconomic and geopolitical environment that continues to negatively impact consumer sentiment and demand. However, we remain confident in the off-price business model, which offers both value and convenience. Given consumers’ heightened focus on both of these attributes, it should bode well for our ability to expand our market share and profitability in the future.”