Ross Stores Net Jumps 22.8 Percent in 2Q; Balmuth to Relinquish CEO Post in 2014
PLEASANTON, Calif.-Second-quarter net income for Ross Stores climbed 22.8 percent to $182 million, riding on gains in both sales and margins.
Meanwhile, the retailer said Michael Balmuth, vice chairman and CEO of Ross Stores, will leave those positions on June 1, 2014, under the terms of a new employment agreement between Balmuth and the retailer.
At that time, Balmuth will become executive chairman overseeing property development and dd's discounts, the company's neighborhood-store format. Norman Ferber, Ross' chairman, will become chairman emeritus at that time. A Ross statement said the company expects to elect a new CEO "from the company's strong bench of very talented and skilled senior executives."
Balmuth has been with Ross for 23 years, serving as CEO for the last 16 years. Ferber said, "This succession plan will enable us to continue to benefit from Michael's more than two decades of significant management experience at Ross, while helping to ensure a seamless transition."
Ross' net sales in the second quarter, which ended on July 28, increased 12 percent to $2.3 billion, including a gain in same-store sales of 7 percent. Gross margin rose 77 basis points to 27.8 percent. Selling, general and administrative expenses were up 9.7 percent in dollars but down 32 basis points as a percentage of sales, to 15 percent.
Balmuth said Ross expects third-quarter same-store sales to grow from 3 to 4 percent, and to pick up 1 to 2 percent in the fourth quarter.