Operating margin was 12.4%, down from last year, as higher merchandise margin was more than offset by increases in freight costs and this year’s wage investments.
Looking ahead into the fourth quarter, the company still expects same-store sales growth of 1% to 2%. Earnings guidance was lifted to the range of $1.09 to $1.14 per share from the prior estimate range of $1.02 to $1.07 per share. The revised earnings estimate includes a one-time, non-cash benefit of about $0.07 per share related to the favorable resolution of a tax matter.
For fiscal 2018, Ross Stores raised its earnings outlook to a range of $4.15 to $4.20 per share from the previous forecast range of $4.01 to $4.10 per share. As entering this year’s holiday season, the company expects another fiercely competitive retail environment.
During the third quarter, the Dublin, California-based company bought back 2.9 million shares of common stock for an aggregate of $278 million. The company remained on track to buy back a total of $1.075 billion in common stock during fiscal 2018.
Shares of Ross Stores ended Monday’s regular trading session down 4.29% at $91.19 on the Nasdaq. The stock has risen over 13% in the year so far and over 26% in the past year.