May 21, 2009
Ross Stores Q1 profit rises; Q2 view tops market
May 21, 2009
May 21 (Reuters) - Off-price retailer Ross Stores Inc (ROST.O) posted a 15 per cent rise in quarterly profit as strong sales and merchandise margins boosted business, and forecast second-quarter earnings above market view, sending its shares up 6 percent.
Ross Stores Spring 2009
"Our business benefited... as we continue to take advantage of the substantial amount of close-out opportunities in the marketplace," Chief Executive Michael Balmuth said in a statement.
The company's low prices for branded merchandise -- from clothes to home goods -- have attracted customers hunting for discounts as they fight the recession.
Net profit for the first quarter was $91.4 million, or 72 cents a share, compared with $79.5 million, or 60 cents a share in the previous year.
Revenue grew 9 percent to $1.69 billion, with comparable store sales rising 3 percent.
Balmuth also said operating margin for the quarter grew about 75 basis points to 8.9 percent, driven by a 90 basis point improvement in gross margins.
For the second quarter, the company expects to earn 60 cents to 63 cents a share. Analysts on average were expecting earnings of 53 cents, according to Reuters Estimates.
The company also said it remained on track to complete the remaining $223 million stock repurchase authorization by the end of fiscal 2009.
Shares of the company were up 6 percent at $38 in trading before the bell on Thursday 21 May. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)
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