Ross Stores Inc. reported earnings per share for the second quarter ended August 3, 2019 of $1.14, up from $1.04 last year. Net earnings grew to $413 million, compared to $389 million in the prior year. Sales rose 6 percent to $4.0 billion, with comparable store sales up 3 percent on top of last year’s strongest quarterly comparison of 5 percent.
For the six months ended August 3, 2019, earnings per share were $2.29, up from $2.15 last year. Net earnings were $834 million versus $808 million in the first half of 2018. Sales for the first six months of 2019 rose 6 percent to $7.8 billion, with comparable store sales up 2 percent versus a 4 percent gain for the first half of 2018. Both the second quarter and year-to-date earnings results include an approximate $.02 per share benefit from favorable timing of expenses that are expected to reverse in the second half.
Barbara Rentler, Chief Executive Officer, commented, “We delivered respectable gains in both sales and earnings for the second quarter. While our Ladies business continued to trail the chain, trends in this important area showed some improvement during the period. Operating margin of 13.7 percent was better than expected, mainly due to favorable timing of expenses that are expected to reverse in the second half.”
Rentler continued, “During the second quarter and first six months of fiscal 2019, we repurchased 3.2 million and 6.6 million shares of common stock, respectively, for an aggregate price of $320 million in the quarter and $640 million year-to-date. As planned, we expect to buy back a total of $1.275 billion in common stock during fiscal 2019.”
Looking ahead, Rentler said, “Our sales outlook remains unchanged. We continue to forecast same store sales gains of 1 percent to 2 percent for both the third and fourth quarters. However, given the recent announcement of 10 percent tariffs on goods sourced from China, including apparel and footwear, we have updated our earnings guidance for the balance of the year.”
Rentler added, “If sales perform in line with this guidance, including a slight impact from the recently announced tariffs, earnings per share for the third quarter ending November 2, 2019 are forecasted to be $.92 to $.96, compared to $.91 a year ago. For the fourth quarter ending February 1, 2020, earnings per share are projected to be $1.20 to $1.25 versus $1.20 in the prior year. As a reminder, last year’s fourth quarter included a one-time per share benefit of $.07 related to the favorable resolution of a tax matter. Based on our first half results and second half guidance, earnings per share for fiscal year 2019 are now planned to be in the range of $4.41 to $4.50.”