Ross Stores posts higher Q1 profit

17 May '06

2 min read

Off-price retailer Ross Stores Inc reported earnings per share for the 13 weeks ended April 29th 2006 of $.41 and net earnings of $59.2 million.

For the 13 weeks ended April 30th 2005, net earnings totaled $50.1 million, and earnings per share were $.34. Sales for the first quarter ended April 29th 2006 increased 15 percent to $1.292 billion, with comparable store sales for the period up 6 percent over the prior year.

Michael Balmuth, VC, President and CEO, said, "Strength across many geographic markets and merchandise categories drove our solid sales gains during the first quarter. The strongest regions during the period were the Southwest and Texas, while the best performing merchandise categories were Shoes, Juniors and Home. Before any stock option related expenses in connection with the adoption of FAS No. 123, first quarter 2006 operating margin expanded by about 40 basis points to 7.7 percent."

"Our improved profitability was driven mainly by a decline in distribution costs as a percent of sales and leverage on other expenses from our solid sales performance, partially offset by higher shrinkage accruals, freight and incentive compensation costs as a percent of revenue," he added.

Looking ahead, Balmuth continued, "Based on our first quarter results, we now forecast earnings per share for the 53 weeks ending February 3rd 2007 to increase 16 to 22 percent, compared to fiscal 2005, to a range of $1.58 to $1.66, after projected non-cash charges equivalent to about $.06 per share related to adoption of FAS No. 123. This annual projection assumes quarterly earnings per share to be $.30 to $.32 for the second quarter of 2006, $.27 to $.29 for the third quarter and $.60 to $.64 for the fourth quarter."

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