Ross Stores Inc. still has some more work to do in its women’s business.
In a Nutshell: Ross Stores’ second quarter results were better than what Wall Street expected, but its women’s business still shows considerable room for improvement.
Net Sales: Sales for the three months ended Aug. 3 climbed 6.5 percent to $3.98 billion from $3.74 billion. Comparable store sales rose 3 percent on top of the 5 percent gain a year ago.
Earnings: Net income rose nearly 6 percent to $412.7 million, or $1.14 a diluted share, from $389.4 million, or $1.104, a year ago.
Wall Street was expecting earnings per share of $1.12 on sales of $3.96 billion.
The off-pricer kept its sales outlook unchanged, and guided same-store sales gains of 1 percent to 2 percent for both the third and fourth quarters. Earnings guidance was updated for the balance of the year to reflect the 10 percent tariffs that will soon go into effect on goods sourced from China.
Presuming sales perform in line with guidance, and reflecting a slight impact from the tariffs, the company expects third-quarter EPS for the period ending Nov. 2 at between 92 cents to 96 cents, versus 91 cents a year ago. For the fourth quarter ending Feb. 1, 2020, EPS was guided to between $1.20 to $1.25, compared with $1.20 in the year-ago period. For the full fiscal year, EPS is now expected in the range of $4.41 to $4.50.
Tariffs will be in place for the first wave of goods starting Sept. 1, followed by the final group of Chinese imports on Dec. 15.
CEO’s Take: Barbara Rentler, chief executive officer, said, “While our ladies business continued to trail the chain, trends in this important area showed some improvement during the period.”