Ross Stores delivers strong outlook
May 22, 2008 - United States Of America
Ross Stores Inc reported that earnings per share for the 13 weeks ended May 3, 2008 rose 25% to $.60, from $.48 for the 13 weeks ended May 5, 2007.
First quarter 2008 results include a real estate settlement that added income equivalent to about $.02 per share during the period.
Net earnings for the first quarter of 2008 were $79.5 million, compared to $67.0 million in the first quarter of 2007.
Sales for the 13 weeks ended May 3, 2008 grew 10% to $1.556 billion, with comparable store sales up 3% over the prior year.
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, "We are pleased with our solid, better-than-expected sales and earnings performance in the first quarter, especially considering the difficult retail climate.
Business benefited as customers responded favorably to the fresh and exciting assortments of name brand bargains we offered.
Dresses and Shoes were the top performing merchandise categories during the period, while the Mid-Atlantic and Texas were the strongest geographic regions."
Mr. Balmuth continued, "Strong execution of our merchandising strategies, combined with strict inventory and expense management, were the primary drivers of our ahead-of-plan earnings during the quarter.
As a result, we were able to realize healthy increases in operating margin, which grew about 45 basis points to 8.2%. Profit margins benefited mainly from better-than-expected improvement in merchandise margins, lower distribution and corporate expenses as a percent of sales and income from a real estate settlement."
Mr. Balmuth also noted, "Our balance sheet and cash flows remain strong. We continued to return capital to stockholders during the quarter through our stock repurchase and dividend programs.
During the first three months of fiscal 2008, we repurchased 2.5 million shares of common stock for an aggregate purchase price of $77 million.
We remain on track to complete half of our current two-year $600 million stock repurchase program this year. In addition, we expect to complete this two-year program without taking on any incremental long-term debt."
Looking ahead, Mr. Balmuth said, "For the second quarter ending August 2, 2008, we are forecasting same store sales gains of 1% to 3% and earnings per share in the range of $.43 to $.47, for a targeted increase of 16% to 27% over the $.37 in earnings per share for the second quarter ended August 4, 2007.
For the fiscal 2008 year ending January 31, 2009, we are now projecting earnings per share in the range of $2.19 to $2.29, which would represent growth of 15% to 21% over the $1.90 in earnings per share for fiscal 2007."