PLEASANTON (dpa-AFX) - Off-price retail chain Ross Stores, Inc. (ROST) reported Thursday a 23 percent increase in profit for the second quarter, reflecting a 7 percent sales growth at stores open for more than a year and improved margins.
Earnings per share met analysts' expectations, while revenues topped their estimates by a whisker. The company also provided an earnings forecast for the third quarter and raised its full-year 2012 earnings guidance, but both were below Street view.
'Our strong sales and earnings growth for both periods continues to be driven by our ability to deliver compelling name brand bargains to today's value-focused consumers while strictly controlling both inventories and expenses,' Vice Chairman and CEO Michael Balmuth said in a statement.
The company on Tuesday extended Balmuth's tenure until May 2016 as part of a long-term management succession plan. He will remain CEO until June 1, 2014, and then transition to the role of Executive Chairman. The company also said its current Chairman Norman Ferber will become Chairman Emeritus in June 2014.
The Pleasanton, California-based apparel and home accessories retailer posted net earnings of $182.02 million or $0.81 per share for the second quarter, higher than $148.28 million or $0.64 per share in the prior-year quarter.
On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.81 per share in the second quarter. Analysts' estimates typically exclude special items.
Sales for the quarter increased 12 percent to $2.34 billion and topped twenty-two Wall Street analysts' consensus estimate of $2.33 billion by a whisker.
Comparable store sales were up 7 percent on top of a 5 percent increase in the year-ago quarter.
The company noted that its operating margin improved about 110 basis points to a record 12.8 percent, reflecting an 80 basis point improvement in cost of goods sold and a 30 basis points decline in selling, general and administrative expenses.
Looking ahead to the third quarter, the company expects earnings in a range of $0.63 to $0.66 per share on projected same-store sales increase of 3 to 4 percent. Analysts estimate earnings of $0.70 per share for the quarter.
For the fourth quarter, the company projects earnings in a range of $0.99 to $1.04 per share on anticipated comparable store sales growth of 1 to 1 percent.
For fiscal 2012, Ross Stores raised its earnings guidance to a range of $3.36 to $3.44 per share from its prior forecast of $3.26 to $3.37 per share. Street is currently looking for full-year 2012 earnings of $3.45 per share.
In Thursday's regular trading session, ROST is currently trading at $68.75, up $0.25 or 0.36% on a volume of 0.32 million shares. In the past 52-week period, the stock has been trading in a range of $33.50 to $70.04.
Copyright RTT News/dpa-AFX
© 2012 AFX News
