Ross Stores, Inc. reported earnings per share for the third quarter ended November 2, 2019 of $1.03, up from $.91 last year and ahead of Wall Street’s consensus estimates of 97 cents a share. Net earnings grew 9.8 percent to $371 million from $338 million in the prior year.
Third quarter sales rose 8 percent to $3.8 billion, exceeding analysts’ sales target of $3.78 billion. Comparable store sales up a strong 5 percent on top of last year’s gain of 3 percent.
For the nine months ended November 2, 2019, earnings per share were $3.32, up from $3.06 last year. Net earnings were $1.2 billion, compared to $1.1 billion in the prior year. Sales year-to-date rose 7 percent to $11.6 billion, with comparable store sales up 3 percent versus a 3 percent gain for the first nine months of 2018.
Barbara Rentler, Chief Executive Officer, commented, “We are pleased that our third quarter results were ahead of expectations. Operating margin of 12.4 percent was also above-plan mainly due to better than expected sales and merchandise margin.”
Rentler continued, “During the third quarter and first nine months of fiscal 2019, we repurchased 3.0 million and 9.6 million shares of common stock, respectively, for an aggregate price of $326 million in the quarter and $966 million year-to-date. We remain on track to buy back a total of $1.275 billion in common stock during fiscal 2019.”
Looking ahead, Rentler said, “As we enter this year’s holiday season, we are up against multiple years of strong comparable store sales gains. In addition, we expect another fiercely competitive retail landscape, along with ongoing uncertainty surrounding the macro-economic and political environment. As such, while we hope to do better, we continue to project fourth quarter comparable store sales gains of 1 percent to 2 percent versus a 4 percent increase last year.”
Rentler continued, “Given these sales assumptions, we continue to expect fourth quarter earnings per share to be in the range of $1.20 to $1.25, which now includes a one-time, non-cash benefit of $.02 per share, primarily due to the favorable resolution of a tax matter, offset by slightly higher pre-tax expenses. This forecasted guidance compares to $1.20 per share in the prior year period, which also included a one-time per share benefit of $.07 related to the favorable resolution of a tax matter.”
Rentler concluded, “Based on our year-to-date results, and our updated fourth quarter guidance, we are now planning earnings per share for fiscal 2019 to be in the range of $4.52 to $4.57, up from $4.26 in fiscal 2018.”
Currently, the company operates Ross Dress for Less, the largest off-price apparel and home fashion chain in the United States with 1,550 locations in 39 states, the District of Columbia, and Guam. The company also currently operates 260 dd’s DISCOUNTS in 19 states.
