Ross Stores (ROST) Tops Q3 EPS by 4c, Revenues Beat

Ross Stores (NASDAQ: ROST) reported Q3 EPS of $0.65, $0.04 better than the analyst estimate of $0.61. Revenue for the quarter came in at $3.75 billion versus the consensus estimate of $3.43 billion.

Barbara Rentler, Chief Executive Officer, commented, “Sales trends accelerated during the third quarter following a slower start in August, driven by an improvement in our merchandise assortments, a later back-to-school season, stronger performance in our larger markets, and our return to more normal store hours.”

Ms. Rentler continued, “Third quarter operating margin of 4.4% was down from 12.4% in 2019, and was negatively impacted by the one-time debt refinancing charge, which was equivalent to 640 basis points. In addition, the year-over-year margin decline reflects higher COVID-related operating costs in 2020 and the deleveraging effect on expenses throughout the business from the decline in same store sales.”

Ms. Rentler added, “Core business results improved during the quarter demonstrating consumers’ continued focus on value, and our ongoing ability to deliver the bargains our customers have come to expect from us.”

Ms. Rentler further commented, “We continue to maintain a strong financial position with over $5.2 billion of total liquidity. In addition to the refinancing of a portion of our senior notes during the third quarter which will significantly reduce the annual interest expense and total cash outlays over the life of the debt, we took other actions to lower our ongoing debt costs, including the repayment of the $800 million revolving credit facility and terminating the undrawn $500 million revolver.”

Ms. Rentler concluded, “As we enter the fourth quarter, our month-to-date comparable store sales in November are down mid-single-digits. In addition, there remains a high level of uncertainty related to the worsening health crisis and we are concerned with how the upsurge of this pandemic might impact consumer demand during what we expect to be a highly competitive holiday shopping season. Given the lack of visibility we have regarding these external risks and how they may evolve and impact our business, we will continue to manage our operations conservatively and will not be providing sales or earnings per share guidance for the fourth quarter.”

For earnings history and earnings-related data on Ross Stores (ROST) click here.

You May Also Be Interested In

• Wells Fargo Downgrades Ross Stores, Inc. (ROST) to Equal Weight
• Korn Ferry (KFY) Tops Q4 EPS by 2c, Beats on Revenue; Offers Q1 Guidance
• Cushman & Wakefield names two capital markets leaders in APAC