Ross Stores Inc. ( ROST ), the second largest off-price retailer of apparel and home accessories, reported a growth of 5% in comparable store sales for the four-week period ended November 26, 2011. The same-store sales result came in better than the company's forecast of a 2% to 3% increase for the month.
For the month under review, sales increased 10% to $765 million from $696 million in the year-ago period. Regionally, Florida, California and Southwest were the top performing market with categories like Juniors and Shoes positively influencing results.
Comparable store sales for third-quarter ended October 29, 2011, grew 5% from the prior-year quarter. However, sales surged 9% to $2,046 million compared with sales of $1,874 million in the year-ago quarter.
Comparable store sales for ten months ended November 26, 2011, spiked 5% compared with a rise of 6% in the prior-year period. Total sales for the period rose 9% to $6,976 million from $6,417 million a year ago.
Execution during the month and the ten-month period was driven by the company's aptitude in providing attractive brand name bargains to customers, who value both quality and price.
Ross' nearest competitor, The TJX Companies Inc. ( TJX ), reported an increase of 4% in same-store sales for the month.
Driven by the ahead-of-plan sales and merchandise gross margin results in third-quarter 2011, the company expects earnings per share to be in the range of $1.53 to $1.59 for the fourth quarter of fiscal 2011 with same store sales increasing 2 to 3%. The current Zacks Consensus Estimate for the quarter is $1.59 per share coinciding with the upper end of the guidance range.
The company expects to achieve a growth rate of 3% to 4% in December 2011 comparable sales and 1% to 2% in January 2012 comparable sales.
For fiscal 2011, the company anticipates earnings in the range of $5.54 to $5.61 per share, an increase of 20.0% to 21.0% over fiscal 2010. The current Zacks Consensus Estimate for the fiscal stood at $5.61 per share.
We believe that Ross' continuous effort to increase its store base coupled with the ability to deliver positive comparable same-store sales will augur well for its top-line growth.
Ross' shares maintain a Zacks #1 Rank, which translates into a short-term Strong Buy rating. Our long-term recommendation on the stock remains Outperform.