INDUSTRY NEWS

PLEASANTON, Calif—Ross Stores, Inc. (NASDAQ:ROST) today reported earnings per share for the 13 weeks ended May 1, 2010 of $1.16, up from $.72 for the quarter ended May 2, 2009. These results represent a 61 percent increase on top of 20 percent growth in the prior year. Net earnings for the first quarter of 2010 rose 56 percent to a record $142.3 million, up from $91.4 million in the first quarter of 2009. Sales for the 13 weeks ended May 1, 2010 grew 14 percent to $1.935 billion, with comparable store sales up 10 percent on top of a 3 percent gain in the prior year.


CEO Michael Balmuth commented, "We are very pleased with our exceptional first quarter performance, which was driven by robust sales gains and record levels of profitability that were well ahead of plan. We believe our results continue to benefit from the superior execution of our off-price strategies combined with our favorable position as a value retailer in the current economic and retail environment."

Balmuth continued, "Operating margin for the quarter grew about 320 basis points to a record 12.1 percent. The largest driver of this increase was a 230 basis point improvement in gross margin, which benefited mainly from higher merchandise gross margin and leverage on occupancy and distribution expenses as a percent of sales. Selling, general and administrative costs as a percent of sales declined by about 90 basis points, primarily due to leverage from the strong gains in same store sales."

Looking ahead, Balmuth said, "For the second quarter ending July 31, 2010, we continue to forecast a same store sales gain of 3 percent to 4 percent and earnings per share growth of 16 percent to 21 percent to $.95 to $.99, up from $.82 in the same period last year. For the 2010 fiscal year ending January 29, 2011, EPS is projected to grow 16 percent to 20 percent to $4.11 to $4.24, up from $3.54 in fiscal 2009. These forecasted increases are especially noteworthy considering they are on top of robust 52 percent gains in earnings per share for both the second quarter and full year in 2009."

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