Ross Stores Earnings: Fifth Straight Quarter of Double-Digit Growth

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S&P 500 (NYSE:SPY) component Ross Stores Inc. (NASDAQ:ROST) reported its results for the third quarter. Ross Stores operates two chains of off-price retail apparel and home accessories stores in the United States and Guam.

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Ross Stores Inc. Earnings Cheat Sheet

Results: Net income for Ross Stores Inc. rose to $159.5 million (72 cents per share) vs. $144 million (63 cents per share) in the same quarter a year earlier. This marks a rise of 10.8% from the year-earlier quarter.

Revenue: Rose 10.6% to $2.26 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ross Stores Inc. fell in line with the mean analyst estimate of 72 cents per share. It fell short of the average revenue estimate of $2.34 billion.

Quoting Management: Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, “We are pleased with the strong sales and earnings increases we generated in the third quarter and first nine months of 2012. Our better-than-expected results year-to-date were driven by our ongoing ability to offer shoppers a fresh and exciting array of compelling name brand bargains for the family and the home. In addition, operating our stores on lower inventories while strictly controlling expenses continues to enhance profit margins.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the second quarter, net income rose 22.8% and in the first quarter, the figure rose 20.6%.

The company has now fallen in step with estimates for the last three quarters. It reported net income of 81 cents in the second quarter, net income of 93 cents in the first quarter and net income of 85 cents in the fourth quarter of the last fiscal year.

Revenue has risen for the last four quarters. Revenue increased 12% to $2.34 billion in the second quarter. The figure rose 13.6% in the first quarter from the year earlier and climbed 11.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company’s cost of sales rose to 72.9% of revenue, just 10.7% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.03 a share to $1.04 over the last ninety days. The average estimate for the fiscal year is $3.50 per share, a rise from $3.45 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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