Ross Stores Earns $1.33 per Share

After today’s close, Ross Stores (ROST) reported very good earnings. For their fiscal Q1, Ross earned $1.33 per share. Three months ago, they told us to expect earnings to range between $1.21 and $1.26 per share. In our CWS Market Review, I said I was expecting earnings around $1.30 per share. Quarterly sales rose 10% to $2.938 billion. Comparable store sales were up 5%. Those are solid numbers.

Barbara Rentler, Chief Executive Officer, commented, “We are pleased with our better-than-expected sales and earnings in the first quarter. Our results continue to benefit from value-focused customers responding favorably to our fresh and exciting assortments of name brand bargains. Operating margin for the first quarter grew to 15.7%, up from 14.6% in the prior year, driven by a combination of higher merchandise margin, strong expense controls, and the aforementioned favorable timing of packaway-related costs.”

Ms. Rentler continued, “During the first quarter of fiscal 2015, we repurchased 1.7 million shares of common stock for an aggregate price of $176 million. As planned, we expect to buy back a total of $700 million in common stock during fiscal 2015 under the new two-year $1.4 billion authorization approved by our Board of Directors in February of this year.

Ross said they see Q2 earnings coming in between $1.19 and $1.24 per share with same stores sales rising 2% to 3%. That guidance is on the light side. Wall Street had been expecting $1.26 per share, though Ross tends to be conservative with their guidance.

Ross also raised their full-year guidance. The previous guidance was $4.60 to $4.80 per share. I knew that was too low and I suspected they were going to raise the low end. Instead, they raised both. The new range is $4.72 to $4.87 per share. Ross earned $4.42 per share last year. (By the way, Ross’s guidance from last May was for $4.09 to $4.21 per share which shows you how conservative they tend to be.)

Remember that Ross Stores will be splitting 2-for-1 next month.

Posted by on May 21st, 2015 at 6:37 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.