INDUSTRY NEWS

PLEASANTON, Calif. (Aug. 20, 2009)—One retailer booming during the recession is a merchandise discounter. Ross Stores, Inc. today reported net earnings for the second quarter of 2009 grew 45 percent to a record $103.4 million, from $71.3 million in the second quarter of 2008. Sales for the 13 weeks ended August 1, 2009 increased 8 percent to $1.769 billion, with comparable store sales up 3 percent on top of a strong 6 percent gain in the prior year.
Vice chairman, president and CEO Michael Balmuth said in a statement, "We are extremely pleased with our healthy sales and robust earnings gains in the second quarter and first six months, both of which were well ahead of plan. This outstanding performance is even more notable considering the ongoing difficult macro economic and retail climate. Our ability to deliver compelling bargains, while operating our business on much lower inventories, remains the primary driver of our strong results. The best performing merchandise categories during the second quarter and year to date periods were dresses and shoes, while the strongest regions were the Mid-Atlantic and Southeast."

Balmuth also noted, "As we ended the first half of the year, our balance sheet and cash flows remained healthy. We continued to return capital to stockholders through our stock repurchase and dividend programs. During the first six months of fiscal 2009, we repurchased 4.2 million shares of common stock for an aggregate purchase price of $154 million. We are on track to complete the remaining $146 million stock repurchase authorization by the end of fiscal 2009."

Looking ahead, Balmuth said, "We are optimistic about the important back-to-school and holiday periods for a number of reasons. We delivered exceptional sales and earnings growth for the first six months on top of strong results the prior year and are up against much easier comparisons in the second half. More importantly, we are well positioned in the value retailing sector and excited about our merchandise offerings and the availability of great product as we enter the fall season. As a result, we are now forecasting same store sales gains of 5% to 6% for both the third and fourth quarters, up from our previous guidance for a 2% to 3% increase."

Based on these updated sales targets, the company is projecting third and fourth quarter earnings per share to be in the ranges of $.57 to $.63 and $.88 to $.94, respectively. These 2009 ranges compare to earnings per share of $.44 and $.76 in the 2008 third and fourth quarters, respectively. For the fiscal year ending January 30, 2010, Ross now projects earnings per share to increase 29% to 34% to $3.00 to $3.12, up from $2.33 in fiscal 2008.

  More Industry News Articles