Friday November 16th, 2012 - 1:05PM
For the 13 weeks ended October 27, Ross Stores, Inc. reported earnings per share of 72 cents up from 63 cents for the 13 weeks ended October 29, 2011. Net earnings for the third quarter increased 11% to $159.5 million.
Analysts surveyed by Thomson Reuters expected on average that the company would earn 72 per share in the most recently completed quarter.
Sales gained 11% to $2.26 billion in the quarter with comparable store sales advancing 6% as compared to the 2011 period, the retailer announced. Earnings before taxes were $254.1 million versus $221.4 million in the period a year earlier.
In a conference call, Michael Balmuth, vice chairman and CEO, noted that home had been lagging behind other Ross departments, with the slowdown beginning in the first quarter. As the company proceeded through the second half of the year, he said, “we were seeing portions of home get back on track, and we're feeling good about our prospects going forward and getting the rest of it on track.”
He added in the conference call, “Relative to Home, on a short-term basis, we have business well positioned, we believe, for gift-giving for the holiday period. And as we look further out, the way we approach things, first we ramp up organization that we have in Home to help fuel some of the categories as business opportunities are starting to present themselves in more small-furniture-type businesses that we believe, in Home, relate to the housing industry.”
In general comments on results, Balmuth said, "We are pleased with the strong sales and earnings increases we generated in the third quarter and first nine months of 2012. Our better-than-expected results year-to-date were driven by our ongoing ability to offer shoppers a fresh and exciting array of compelling name brand bargains for the family and the home. In addition, operating our stores on lower inventories while strictly controlling expenses continues to enhance profit margins. Operating margin in the third quarter grew about 35 basis points to 11.3%. As a percent of sales, higher merchandise margin, lower distribution costs and leverage on occupancy and general, selling and administrative expenses were partially offset by a lower shortage benefit than the prior year and increases in freight and buying costs. While shortage results from this year's physical inventory were better than expected, the favorable variance versus our reserve was larger in the third quarter of 2011."