Ross Q3 Net Jumps 10.8 Percent
PLEASANTON, Calif.-Increased sales and strict expense controls boosted Ross Stores' bottom line by 10.8 percent in its third quarter, to $159.5 million.
Net sales in the quarter, which ended on Oct. 27, gained 10.8 percent to $2.3 billion, including a pickup in same-store sales of 6 percent. Michael Balmuth, Ross' vice chairman and CEO, said the results were better than the company expected. "Our focus on bargains continues to make our stores attractive destinations for value-conscious customers," Balmuth said.
He added that the retailer was able to enhance profits through operating its stores on lower inventories and keeping expenses in line. Selling, general and administrative expenses rose 7.8 percent in dollars but fell 41 basis points as a percentage of sales, to 15.8 percent. Gross margin slipped six basis points to 27.1 percent, partly because of increases in the costs of buying and freight.
Looking ahead, Ross projected a same-store sales increase for the fourth quarter at between 1 and 2 percent. Balmuth explained the somewhat muted forecast by noting the difficulties of predicting how promotional other retailers may become during the holiday shopping season, and in predicting consumers' moods with economic and political uncertainties still looming.