For the nine months ended October 27, 2012, earnings per share were $2.46, up from $2.01 for the nine months ended October 29, 2011. These results represent 22% growth following a 24% increase for the first nine months of 2011. Net earnings for the year-to-date period in 2012 grew 18% to $550.2 million, up from $465.2 million in the prior year period. Sales for the first nine months of 2012 increased 12% to $6.960 billion, with comparable store sales up 7% on top of a 5% gain last year.
Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "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."
Mr. Balmuth continued, "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."
Mr. Balmuth also noted, "We continued to enhance stockholder returns through our stock repurchase and dividend programs in the third quarter. During the first nine months of fiscal 2012, we repurchased 5.4 million shares of common stock for an aggregate price of $334 million. We expect to buy $116 million in common stock during the fourth quarter, which will complete the two-year $900 million program announced in early 2011."
Fourth Quarter 2012 Guidance
Looking ahead, Mr. Balmuth said, "Our focus on bargains continues to make our stores attractive destinations for value-conscious customers. During the holiday season, however, it is always difficult to predict how promotional other retailers may become or how current macro-economic and political uncertainties may impact consumer spending. We are also anniversarying the robust 7% increase in same store sales from last year's fourth quarter. So, while we hope to do better, we believe it is prudent to maintain our prior fourth quarter guidance."
For the 13 weeks ending January 26, 2013, the Company continues to forecast same store sales to be up 1% to 2% on top of a 7% gain for the 13 weeks ended January 28, 2012. For the 14 weeks ending February 2, 2013, earnings per share are projected to be in the range of $.99 to $1.04, compared to $.85 for the 13 weeks ended January 28, 2012. The fourth quarter guidance range includes the projected $.08 to $.09 benefit to earnings per share from the 53rd week in fiscal 2012.
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