ROSS STORES REPORTS SECOND QUARTER SALES AND EARNINGS, ISSUES SECOND HALF 2014 GUIDANCE

Dublin, California, August 21, 2014 — Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 13 weeks ended August 2, 2014 rose 16% to $1.14, up from $.98 for the 13 weeks ended August 3, 2013. Net earnings for the 2014 second quarter grew 12% to $239.6 million, up from $213.1 million in the prior year. Second quarter 2014 sales increased 7% to $2.730 billion, compared to $2.551 billion in the second quarter of 2013. Comparable store sales for the 13 weeks ended August 2, 2014 grew 2% on top of a 4% gain for the 13 weeks ended August 3, 2013.
For the six months ended August 2, 2014, earnings per share increased 12% to $2.30, up from $2.06 for the six months ended August 3, 2013. Net earnings for the six months ended August 2, 2014 were $483.5 million, up 8% from $447.7 million in the first half of 2013. Sales for the first six months of 2014 rose 6% to $5.410 billion on a comparable store sales gain of 2% versus a 3% increase for the same period last year. Both the quarter and the first six months include a one-time benefit to earnings, equivalent to approximately $.02 per share, from the favorable resolution of an outstanding legal matter.
Barbara Rentler, Chief Executive Officer, commented, “Our second quarter sales performed at the high-end of our expectations as today’s value-focused consumers continued to respond to our wide assortment of competitive name brand bargains. Merchandise gross margin was above plan, which coupled with strong expense controls, enabled us to deliver quarterly earnings per share that were above the high end of our guidance.” Ms. Rentler continued, “Operating margin for the second quarter grew to a record 14.3%, up from 13.6% in the prior year. This increased level of profitability was driven by a 25 basis point improvement in cost of goods sold, mainly due to higher merchandise gross margin, and a 45 basis point decline in selling, general and administrative expenses which benefited from tight expense controls and resolution of the aforementioned legal matter.”
Ms. Rentler noted, “We also continue to enhance stockholder returns through our stock repurchase and dividend programs. During the first six months of fiscal 2014, we repurchased 4.1 million shares of common stock for an aggregate price of $277 million. As a result, we remain on track to buy back a total of $550 million in common stock during fiscal 2014, which would complete the two-year $1.1 billion program authorized at the beginning of 2013.”
Looking ahead, Ms. Rentler said, “For the 13 weeks ending November 1, 2014, earnings per share are projected to be $.83 to $.87, up from $.80 in last year’s third quarter. For the 13 weeks ending January 31, 2015, earnings per share are forecast to be in the range of $1.05 to $1.09, up from $1.02 in the 2013 fourth quarter. Earnings per share for the 52 weeks ending January 31, 2015 are now forecast to be $4.18 to $4.26, up from $3.88 for the 52 weeks ended February 1, 2014. These guidance ranges are based on same store sales that are projected to increase 1% to 2% for both the third and fourth quarters of 2014.”
The Company will provide additional details concerning its second quarter results and management’s outlook for the remainder of the year on a conference call to be held on Thursday, August 21, 2014 at 4:15 p.m. Eastern time. Participants may listen to a real-time audio webcast of the conference call by visiting the Investors section of the Company’s website located at www.rossstores.com. A recorded version of the call will also be available at the website address, and via a telephone recording through 8:00 p.m. Eastern time on Thursday, August 28, 2014 at 404-537-3406, ID #82563802.

Source: Ross Website