Ross Stores, Inc. (ROST) Tops Q2 EPS by 6c, Raises FY14 EPS Guidance

Ross Stores, Inc. (Nasdaq: ROST) reported Q2 EPS of $1.14, $0.06 better than the analyst estimate of $1.08. Revenue for the quarter came in at $2.73 billion versus the consensus estimate of $2.71 billion.

Comparable store sales for the 13 weeks ended August 2, 2014 grew 2% on top of a 4% gain for the 13 weeks ended August 3, 2013.

Barbara Rentler, Chief Executive Officer, commented, "Our second quarter sales performed at the high-end of our expectations as today's value-focused consumers continued to respond to our wide assortment of competitive name brand bargains. Merchandise gross margin was above plan, which coupled with strong expense controls, enabled us to deliver quarterly earnings per share that were above the high end of our guidance."

Ms. Rentler continued, "Operating margin for the second quarter grew to a record 14.3%, up from 13.6% in the prior year. This increased level of profitability was driven by a 25 basis point improvement in cost of goods sold, mainly due to higher merchandise gross margin, and a 45 basis point decline in selling, general and administrative expenses which benefited from tight expense controls and resolution of the aforementioned legal matter."

Ms. Rentler noted, "We also continue to enhance stockholder returns through our stock repurchase and dividend programs. During the first six months of fiscal 2014, we repurchased 4.1 million shares of common stock for an aggregate price of $277 million. As a result, we remain on track to buy back a total of $550 million in common stock during fiscal 2014, which would complete the two-year $1.1 billion program authorized at the beginning of 2013."

Guidance:

Ross Stores sees FY2014 EPS of $4.18 - $4.26, versus prior guidance of $4.09 - $4.21 and the consensus of $4.21.

Ross Stores sees Q3 2014 EPS of $0.83 - $0.87, versus the consensus of $0.86.

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

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