Ross Stores Inc.
) - one of the largest off-price apparel and home fashion chain
retailers in the U.S. - reported stronger sales and same-store
sales (comps) numbers for the four weeks ended October 27,
Driven by strong consumer demand for its wide array of brands,
Ross Stores' comps for October increased 4% compared with 5% in
the prior-year period ended October 29, 2011, meeting its own
upper-end guidance range of 2%-4%. Consequently, the company's
total sales for the four-week period climbed 8% to $715 million
compared with $661 million in the year-ago period.
Category-wise, the company's juniors and accessories sections
outperformed during the month, while region-wise, Texas and
Southwest areas were the best performers.
Moreover, Ross Stores provided its sales and comps result for
the third quarter of fiscal 2012. During the quarter, the company
generated total sales of $2.263 billion, up by 11% from the
year-ago quarter's sales of $2.046 billion. During the period,
comps grew 6% compared with a 5% increase during the similar
period last year.
Further, Ross Stores reported nine months comps gain of 7%
versus a 5% increase registered in the year-ago period. Net sales
for the period jumped 12% to $6.960 billion from $6.210 billion
in the year-ago period.
Robust sales mainly reflect the company's relentless focus on
offering an exciting collection in its name-brand fashion for the
family and home, which appeals to its value-oriented
Bolstered by solid top-line performance along with expectation
of achieving higher merchandise margin, management raised its
earnings guidance range for the third quarter of fiscal 2012. The
company now expects earnings in the range of 71-72 cents per
share, up from 70-71 cents projected earlier.
One of Ross Stores' peers,
) registered a 4% increase in its October 2012 comps. Another
) also reported positive comps of 0.6% for the same month.
Ross Stores has implemented a micro-merchandising strategy,
through which it expects to enhance total sales and profitability
by expanding in its existing markets. Moreover, Ross remains
focused on new store growth, share buybacks and attractive
dividend payouts amidst a situation in which other retailers are
implementing cutbacks. Moreover, the company has the financial
strength to continue on its course and build shareholders'
Ross Stores' shares maintain a Zacks #2 Rank, which translates
into a short-term Buy rating. However, we remain slightly
cautious about the stock due to sluggish economic recovery and
intense competition from other players, and therefore maintain a
long-term Neutral recommendation on the stock.
Ross Stores and its subsidiaries operate two chains of
off-price retail apparel and home accessory stores in the U.S.
These stores offer branded apparel, shoes and accessories for the
entire family, as well as gift items, linens and other
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