Ross Net Rises 19 Percent in Third Quarter
PLEASANTON, Calif.-Increased sales and improved margins brought a 19 percent gain in Ross Stores' bottom line in its fiscal third quarter ending on Oct. 29.
Net income totaled $144 million in the quarter. Net sales increased 9.2 percent to $2 billion, including a 5 percent pickup in same-store sales. Michael Balmuth, Ross' vice chairman and CEO, said the sales gain was driven by the "compelling bargains" the stores offer on name-brand fashions.
Gross margin was essentially flat, rising a bare three basis points to 27.2 percent. Selling, general and administrative expenses were up 6.4 percent in dollars but down 43 basis points as a percentage of sales, to 16.2 percent. Balmuth said Ross' ability to operate with lower in-store inventories "is driving faster turns and lower markdowns, which continues to benefit profit margins."
He said Ross has a cautious outlook for the fourth quarter, due to "the ongoing uncertainty in the macroeconomic environment as well as the possibility of an even more competitive than usual holiday season." The company has forecast fourth-quarter same-store sales to rise from 2 to 3 percent.