Ross Stores profits climb 17.6% in 4Q

NEWARK, CA— Building sales at a double-digit pace as it opens new doors, Ross Stores Inc. pushed fourth-quarter profits up by 17.6 percent, to $58.7 million from $50.0 million last year.

Getting a strong lift from its burgeoning home business, sales moved up by 13.7 percent, to $964.6 million from $848.4 million a year ago. Same-store sales increased by 3.0 percent.

Ross, an off-price apparel retailer, has been plumping up its increasingly important home business, and in 2002 was the nation's 25th largest retailer of home textiles, generating about $152.0 million in home fashions sales.

During the all-important Christmas quarter, said Michael Balmuth, vice chairman and ceo, "The strongest merchandise departments were Home and Shoes, with same-store sales gains in the high single to low double-digit range for the quarter."

Breaking sales out on a regional basis, Balmuth said" sales trends in the fourth quarter were relatively broad-based with positive comparable store sales gains in all major markets including California, where same-store sales rose by 3.0 percent."

Average gross margin slipped slightly in the period, by 10 basis points, to 25.3 percent from 25.4 percent. Balmuth explained, "a slight decline in gross margin due to the combination of a shaper pricing strategy and higher freight costs was partially offset by improved shortage results and lower markdowns and distribution costs as a percent of sales." And more than offsetting the weaker margins, he said, were lower operating costs, "due to a relative reduction in benefit and incentive plan costs compared to the prior-year fourth quarter." SG&A expenses improved by 30 basis points, to 15.4 percent of sales from 15.7 percent a year ago.

For all of last year, Ross profits shot up by 29.8 percent, to $201.2 million from $155.0 million the preceding year. Sales expanded by 18.2 percent, to $3.5 billion from $3.0 billion, and same-store sales grew by 7.0 percent.