Home grows to 25% of Ross Stores’ biz
August 18, 2017,
Dublin, Calif. – Home is a growing business for Ross Stores, outperforming the company during the second quarter.
“Home continues to be a strong business for us, as it is for many people,” noted Barbara Rentler, ceo, during Ross Stores Inc.’s earnings call Thursday evening,
Much like its direct competitors, Ross Stores is benefitting from a retail environment that favors off-price stores. The chain posted strong second quarter results that were led by a 12.4% increase in net earnings to $317 million, or $0.82 per diluted share, versus last year’s $282 million, or $0.71 per diluted share.
Sales for the period, ended July 29, rose 8% to $3.43 billion from $3.18 billion. Comparable store sales were up 4% – on top of last year’s 4% gain – driven by higher traffic and an increase average basket size.
Rentler noted that although inventory levels were down in the quarter, the promotional environment “continued to be very aggressive.”
She continued: “That is the way to do business now. That is going to continue as we go forward through back-to-school and through holiday.”
Year to date, net earnings were up 11.3% to $638 million, or $1.64 per . Sales rose 7% to $6.738 billion, and comps increased 4%, compared to a 3% gain a year ago.
Looking ahead to the second half of this year, Ross Stores expects to face what it considers “most challenging prior-year comparisons and a volatile retail backdrop.”
That said, the company is maintaining a “somewhat cautious” outlook for the balance of this year, as reflected in its guidance.
“Based on our first half results and second half guidance, fiscal 2017 earnings per share for the 53 weeks ending February 3, 2018 are now planned to increase 12% to 14% to $3.16 to $3.23, on top of a 13% gain last year,” Rentler summed. “As a reminder, both our fourth quarter and full year guidance include an approximate $.08 benefit from the 53 rd week in fiscal 2017.”
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