Ross Ups Full Year Guidance
September 1, 2008-- Home Textiles Today,
In a very good year for off-price retailers, Ross Stores had record second-quarter net earnings of $71.3 million, up 40% from $50.9 million in the year-ago period; EPS of 54 cents was up 46% from 37 cents last year.
Quarterly sales increased 14% to $1.64 billion, with comparable store sales up 6% over the prior-year quarter.
Vice chairman, president and ceo Michael Balmuth told analysts that Ross has raised its full year earnings per share projection to $2.33 - $2.38, which would be up 23% to 25% from EPS of $1.90 in fiscal 2007.
And the company is playing things conservatively for the holiday season — for the six months ended Aug. 2, EPS of $1.13 is already up 33% from 85 cents in the year-ago period.
Half-year sales of $3.20 billion are up 12%, with comps gaining 5%. One factor in the Ross Stores outlook is the broad and deep availability of closeout goods, and the company's "more aggressive" pursuit of those opportunities, Balmuth said.
Michael O'Sullivan, evp and chief administrative officer, said the company expects more from its low-end dd's discounts chain going forward, as it has "made adjustments" and "absorbed growth" while doubling the store count. The dd's operation, O'Sullivan said, has thus far in 2008 put a drag on corporate operating margin "of 30 to 35 basis points."
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