Ross Stores powered through the third quarter with strong comparable store sales growth, and stayed cautiously optimistic about its fourth quarter prospects.
The off-price retailer reported earnings per share for the third quarter ended November 2, 2019, of $1.03, up from $.91 last year. Net earnings grew to $371 million from $338 million in the prior year. Third quarter sales rose 8% to $3.8 billion, with comparable store sales up a strong 5% on top of last year’s gain of 3%.
Barbara Rentler, CEO, Ross Stores, said, “We are pleased that our third quarter results were ahead of expectations. Operating margin of 12.4% was also above-plan mainly due to better than expected sales and merchandise margin.”
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% to 2% versus a 4% 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. 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.”