Ross Stores Inc. (ROST) Thursday reported an increase in profit for the first quarter, as the discount apparel retailer's revenue grew moderately, and curbed operating costs and inventory, with earnings in line with Wall Street estimates. Nonetheless, revenues for the quarter fell short of expectations.
Moving ahead, the retailer lifted the lower end of its full year outlook, the mid-point of which is still indicated to miss current Street estimates.
Pleasanton, California-based Ross Stores' first-quarter profit rose to $243.9 million or $1.15 per share from $234.6 million or $1.07 per share last year. On average, 29 analysts polled by Thomson Reuters expected earnings of $1.15 per share for the quarter. Analysts' estimates typically exclude special items.
Ross Stores, which owns the Ross Dress for Less and Dd's Discounts chains, said revenues for the quarter grew 6 percent to $2.68 billion compared with $2.54 billion in the prior year. However, revenues for the quarter fell short of analysts' mean estimate of $2.69 billion.
Same-store sales for the 13 weeks ended May 3 rose 1 percent over last year first quarter.
The retailer's strict inventory and operating costs control measures helped it offset the challenges cast by the competitive retail environment and harsh winter. Selling, general and administrative costs dropped by 10 basis points.
Chief Executive Michael Balmuth said, "First quarter earnings per share performed at the high end of our guidance as strict inventory and expense controls offset the impact from unfavorable weather and a more challenging retail environment. Sales trends improved in April with more seasonal Spring weather that coincided with the later Easter shopping period."
Looking forward to the second quarter, Ross expects earnings of $1.05 to $1.09 per share. Analysts currently see earnings of $1.08 per share for the quarter.
For the full year, Ross now projects earnings of $4.09 to $4.21 per share, up from prior outlook of $4.05 to $4.21 per share. Analysts currently expect earnings of $4.21 per share.
ROST closed Thursday's trading at $68.10, up $0.02 or 0.03%, on the Nasdaq. The stock, however, slipped $0.10 or 0.15% in after-hours trade.
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