Ross Stores (NASDAQ: ROST) reported a 6% jump in earnings in the second quarter driven by higher sales and a decline in income taxes provision. The results exceeded analysts’ expectations. However, the off-price retail apparel and home fashion operator guided third-quarter earnings below consensus estimates.
Net income rose by 6% to $412.72 million or $1.14 per share. The results included about $0.02 per share benefit from favorable timing of expenses that are expected to reverse over the second half of the year.
Total sales grew 6% year-over-year to $4 billion. Comparable store sales rose 3% compared to the previous year’s gain of 5%. The company delivered respectable gains in both sales and earnings for the second quarter. While Ladies business continued to trail the chain, trends in this important area showed some improvement during the period.
For the third quarter, the company expects comparable store sales growth in the range of 1% to 2% and earnings in the range of $0.92 to $0.96 per share. For the fourth quarter, Ross Stores predicts comparable store sales of 1% to 2% and earnings in the range of $1.20 to $1.25 per share.
For fiscal 2019, Ross Stores narrowed its earnings guidance to the range of $4.41 to $4.50 per share from the previous range of $4.38 to $4.52 per share.
For the second quarter, operating margin of 13.7% was better than expected, mainly due to favorable timing of expenses that are expected to reverse in the second half. At the end of second quarter, stores opened increased by 5% year-over-year to 1,772.
The company’s expansion strategy is to open additional stores based on market penetration, local demographic characteristics, competition, expected store profitability, and the ability to leverage overhead expenses. The company continues to evaluate opportunistic real estate acquisitions and opportunities for potential new store locations.
During the second quarter, the company repurchased 3.2 million for an aggregate price of $320 million. As planned, Ross Stores expects to buy back a total of $1.275 billion in common stock during fiscal 2019.
Latest economic data evoked mixed sentiment this week -- the rebound in economic activity has raised inflation concerns while jobless claims declined for the sixth week in a row. The
Video game retailer GameStop Corp. (NYSE: GME), which has become the talk of the town after the unprecedented stock rally in recent weeks, reported a narrower loss for the first
The steel industry managed to shrug off the pandemic blues earlier than expected as the recovery in industrial activity pushed up demand. With the vaccination drive and the government’s aggressive