Ross profits rise 25 percent
March 22, 2004-- Home Textiles Today,
Helped by rapid expansion and a double-digit gain in sales, coupled with stronger margins and lower costs, fourth-quarter profits at off-pricer Ross Stores Inc. soared 25.5 percent, to $73.7 million from $58.7 million last year.
Fueled by the continued rollout of new stores and a strong home business, sales improved by 13.9 percent to $1.1 billion. Same-store sales improved by 4 percent.
In addition to stronger sales, the bottom line got a big lift from a lower level of markdowns, which resulted in stronger margins, 26.3 percent versus 25.3 percent a year ago. Gross margin dollars, fueled by stronger sales and stronger margins, jumped by 18.1 percent, to $288.5 million from $244.3 million.
In another lift to earnings, operating costs were whittled down to 15.2 percent of sales from 15.4 percent a year ago.
Acting as a drag, the company recorded $11,000 in interest expense during the closing quarter, after earning $214,000 in interest income during the same period last year.
Michael Balmuth, vice chairman and CEO, commented, "The strongest geographic markets in the quarter were Arizona, Texas, the Southeast and California, all posting solid same-store sales gains in the mid to high single digits. The strongest merchandise departments were home, accessories and juniors, with comparable store sales gains in the high single digits."
During the year, Balmuth said, Ross opened 61 stores for unit growth of 12 percent. Tapping into new markets and extending its geographic reach, the retailer opened stores in Georgia, North Carolina, South Carolina, Alabama, Louisiana and Tennessee.
Ross Stores Inc.
|Qtr. 1/31 (x000)||2003||2002||% chg|
|a-Fourth-quarter results include $11,000 in interest expense, compared with $214,000 in interest income last year. For all of last year, the retailer recorded $262,000 in interest income, compared with $279,000 in interest expense this year.
|Oper. income (EBIT)||121,088||96,245||25.8|
|Per share (diluted)||0.48||0.37||29.7|
|Average gross margin||26.3%||25.3%||—|
|12 months||2003||2002||% chg|
|Oper. income (EBIT)||374,289||330,621||13.2|
|Per share (diluted)||1.47||1.26||16.7|
|Average gross margin||25.6%||25.6%||—|
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