Ross Stores Earnings: Profits Grow by Double Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component Ross Stores Inc. (NASDAQ:ROST) reported its results for the first 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 Earnings Cheat Sheet for the First Quarter

Results: Net income for Ross Stores Inc. rose to $208.6 million (93 cents per share) vs. $173 million (74 cents per share) in the same quarter a year earlier. This marks a rise of 20.6% from the year-earlier quarter.

Revenue: Rose 13.6% to $2.36 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ross Stores Inc. fell in line with the mean analyst estimate of 93 cents per share. Analysts were expecting revenue of $2.34 billion.

Quoting Management: Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, “We are pleased with our much better-than-expected financial results in the first quarter. Our robust sales and earnings were driven mainly by our ongoing ability to deliver a wide array of fresh and exciting name brand bargains to today’s value-focused consumers. In addition, we believe that favorable weather across many of our markets also contributed to our above-plan performance.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 18.6% and in the third quarter of the last fiscal year, the figure rose 18.6%.

The company has been on par with analyst estimates for three straight quarters. It reported net income of 85 cents in the fourth quarter of the last fiscal year, net income of 63 cents in the third quarter of the last fiscal year and net income of 64 cents in the second quarter of the last fiscal year.

Revenue has risen for the last four quarters. Revenue increased 11.8% to $2.4 billion in the fourth quarter of the last fiscal year. The figure rose 9.2% in the third quarter of the last fiscal year from the year earlier and climbed 9.3% in the second quarter of the last fiscal year from the year-ago quarter.

Gross margins increased 0.2 percentage point to 28.8%. The growth was likely driven by increased revenue, as the figure rose 13.6% from the year-earlier quarter, while costs rose 13.4%.

Looking Forward: Analysts have a more positive outlook about the company’s results for next quarter. The average estimate for second quarter is 75 cents per share, an increase from 74 cents sixty days ago. For the fiscal year, the average estimate has moved up from $3.27 a share to $3.37 over the last ninety days.

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

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