Ross Stores Q1 Profit Rises, Lifts FY Outlook

(RTTNews) - Ross Stores Inc. (ROST) Thursday reported an increase in profit for the first quarter, as the discount apparel retailer's revenue grew 10 percent while operating margins improved. Earnings for the quarter trumped Wall Street estimates, as did revenues. Moving ahead, the company lifted its full-year guidance, but detailed a weak outlook for the second quarter.

Pleasanton, California-based Ross Stores' first-quarter profit rose to $282.2 million or $1.37 per share from $243.9 million or $1.15 per share last year.

Ross said results for the quarter included a benefit of about $0.04 per share mainly from the favorable timing of packaway-related costs. Adjusting for this, quarterly earnings per share rose 16 percent over the prior year.

On average, 29 analysts polled by Thomson Reuters estimated earnings of $1.28 per share for the quarter. Analysts' estimates typically exclude special items.

Ross Stores, which owns the Ross Dress for Less and Dd's Discounts chains, said first-quarter revenues increased 10 percent to $2.94 billion from $2.68 billion last year. Analysts had a consensus revenue estimate of $2.89 billion for the quarter.

Same-store sales for the quarter increased 5 percent.

Chief Executive Barbara Rentler said, "We are pleased with our better-than-expected sales and earnings in the first quarter. Our results continue to benefit from value-focused customers responding favorably to our fresh and exciting assortments of name brand bargains."

Operating margin for the quarter improved to 15.7 percent from 14.6 percent a year ago, driven by a combination of higher merchandise margin, strong expense controls, and the favorable timing of packaway-related costs.

Looking forward to the second quarter, the company expects earnings of $1.19 to $1.24 per share; adjusting for the recently announced two-for-one stock split, earnings are forecast to be $0.59 to $0.62 per share. Analysts currently expect earnings of $1.26 per share for the quarter.

Ross expects same store sales to increase 2 to 3 percent for the second quarter.

For the full year 2015, the company now expect earnings of $4.72 to $4.87 per share; or $2.36 to $2.44 per share, on a split-adjusted basis. Analysts currently expect earnings of $4.83 per share for the year.

Earlier, the company projected earnings of $4.60 to $4.80 per share for 2015.

ROST closed Thursday's trading at $101.55, up $0.62 or 0.61%, on the Nasdaq. The stock further gained $0.44 or 0.43% in the after-hours trade.