Updated from 12:48 p.m. EDT
Second-quarter earnings at
rose 13% despite slow same-store sales, the company said Wednesday.
The clothing chain earned $54.6 million, or 70 cents a share, in its quarter ended Aug. 2. That result compared with the year-ago quarter, when Ross earned $49.7 million, or 62 cents a share.
Overall revenue at Newark, Calif.-based Ross rose 10.1% from the second quarter last year to $965.6 million. But on a same-store basis, which compares results at similar outlets open more than one year, the company's sales were unchanged.
Ross's results met analysts' estimates and the company's projections. Analysts polled by Thomson First Call were expecting Ross to earn 70 cents a share on $964.7 million in sales. The company updated its earnings guidance earlier this month, saying it expected profits to hit the top of its previously stated 66 cents to 70 cents a share range.
During a conference call with investors and analysts, Ross officials reiterated the earnings guidance they gave earlier this month. Company officials estimate the company will earn 64 cents to 66 cents a share in the third quarter on same-store sales growth of 3% to 4%. In the fourth quarter, the company expects to earn 85 cents to 88 cents per share on 3% to 4% comparable-store sales growth.
Analysts have projected that Ross will earn 65 cents a share in the third quarter.
Despite the company's overall earnings growth in the second quarter, its operating earnings remained essentially flat at 9.3%. Mixed results on its expense lines helped keep operating earnings in check.
The company's gross profit margins narrowed by 13 basis points from the year-ago quarter to 25% of sales. Gross profit margin represents between what a company charges for its goods and the direct cost to the company of selling those goods. The decline in gross margin at Ross during the quarter was a result of declining profit margins on its merchandise and increased store occupancy costs, company officials said.
The company offset that decline in gross margin with a small drop in its marketing, general and administrative expenses as a portion of sales. Such costs fell by 8 basis points to 15.72% of sales. Company officials attributed that decline to decreased advertising and distribution expenses and a drop in benefits and incentive pay costs.
Despite meeting expectations, Ross shares traded down following its report. In recent trading, the company's stock was off 33.8 cents, or 0.7%, to $47.65.