DUBLIN, Calif.--(BUSINESS WIRE)--Aug. 23, 2018-- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the second quarter ended August 4, 2018 of $1.04, up from $.82 last year. Net earnings grew to $389 million, compared to $317 million in the prior year. Sales rose 9% to $3.7 billion, with comparable store sales up 5% over the 13 weeks ended August 5, 2017. This is on top of a 4% increase in same store sales for the 13 weeks ended July 29, 2017.

For the six months ended August 4, 2018, earnings per share were $2.15, up from $1.64 last year. Net earnings were $808 million versus $638 million in the first half of 2017. Sales for the first six months of 2018 rose 9% to $7.3 billion, with comparable store sales up 4% over the 26 weeks ended August 5, 2017. This compares to a same store sales gain of 4% for the 26 weeks ended July 29, 2017. Both the second quarter and year-to-date earnings results include the benefit of tax reform legislation.

Barbara Rentler, Chief Executive Officer, commented, “We are pleased with the above-plan growth we delivered in both sales and earnings in the second quarter. Though better than expected, operating margin of 13.8% was down from last year as higher merchandise margin and leverage on occupancy and buying costs were more than offset by a combination of unfavorable timing of packaway-related expenses, higher freight costs, and this year’s wage investments.”

Ms. Rentler continued, “During the second quarter and first six months of fiscal 2018, we repurchased 3.2 million and 6.5 million shares of common stock, respectively, for an aggregate price of $273 million in the quarter and $529 million year-to-date. As planned, we expect to buy back a total of $1.075 billion in common stock during fiscal 2018.”

Looking ahead to the second half, Ms. Rentler said, “While we hope to do better, given our robust multi-year comparisons, we continue to forecast same store sales to grow 1% to 2% for both third and fourth quarters. If sales perform in line with this guidance, earnings per share for the third quarter ending November 3, 2018 are forecasted to be $.84 to $.88, up from $.72 a year ago. For the 13 weeks ending February 2, 2019, earnings per share are projected to be $1.02 to $1.07 versus $1.19 for the 14 weeks ended February 3, 2018. Last year’s fourth quarter included a per share benefit of $.14 from a one-time revaluation of deferred taxes and $.10 from the 53^rd week. Based on our first half results and second half guidance, earnings per share for the 52 weeks ending February 2, 2019 are now planned to be in the range of $4.01 to $4.10.”

Commenting on the Company’s future expansion prospects, Ms. Rentler said, “We are excited to announce that we have raised our long-term projected store potential to 3,000 locations, up from the previous target of 2,500. This is based on our research that indicates we can now further increase penetration in both existing and new markets. As a result, we believe that Ross Dress for Less can grow to about 2,400 locations across the country, up from our prior target of 2,000, and that dd’s DISCOUNTS can ultimately become a chain of approximately 600 stores, versus our previous projection of 500. This higher store potential provides us with a considerable amount of long-term growth opportunities given our current store base of 1,453 Ross Dress for Less and 227 dd’s DISCOUNTS.”

The Company will host a conference call on Thursday, August 23, 2018 at 4:15 p.m. Eastern time to provide additional details concerning its second quarter results and management’s outlook for the remainder of the year. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at www.rossstores.com. An audio playback will be available at 404-537-3406, PIN #6066259 until 8:00 p.m. Eastern time on August 30, 2018, as well as on the Company’s website.

Forward-Looking Statements: This press release contains forward-looking statements regarding expected sales, earnings levels, new store growth opportunity, and other financial results in future periods that are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “target,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “outlook,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less^® (“Ross”) and dd’s DISCOUNTS^® include without limitation, competitive pressures in the apparel or home-related merchandise retailing industry; changes in the level of consumer spending on or preferences for apparel and home-related merchandise; market availability, quantity, and quality of attractive brand name merchandise at desirable discounts and our buyers’ ability to purchase merchandise that enables us to offer customers a wide assortment of merchandise at competitive prices; impacts from the macro-economic environment, financial and credit markets, and geopolitical conditions that affect consumer confidence and consumer disposable income; our ability to continually attract, train, and retain associates to execute our off-price strategies; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores; potential information or data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could result in theft or unauthorized disclosure of customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business; potential disruptions in our supply chain or information systems; issues involving the quality, safety, or authenticity of products we sell, which could harm our reputation, result in lost sales, and/or increase our costs; our ability to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margin; changes in U.S. tax or tariff policy regarding apparel and home-related merchandise produced in other countries that could adversely affect our business; volatility in revenues and earnings; an adverse outcome in various legal, regulatory, or tax matters; a natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center; unexpected issues or costs from expanding in existing markets and entering new geographic markets; obtaining acceptable new store sites with favorable consumer demographics; damage to our corporate reputation or brands; effectively advertising and marketing our brands; issues from selling and importing merchandise produced in other countries; and maintaining sufficient liquidity to support our continuing operations, new store and distribution center growth plans, and stock repurchase and dividend programs. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2017, and Form 10-Q and Form 8-Ks for fiscal 2018. The factors underlying our forecasts are dynamic and subject to change. As a result, our forecasts speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We do not undertake to update or revise these forward-looking statements.

Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2017 revenues of $14.1 billion. The Company operates Ross Dress for Less^® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,453 locations in 38 states, the District of Columbia, and Guam as of August 4, 2018. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operates 227 dd’s DISCOUNTS^® in 18 states as of August 4, 2018 that feature a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day. Additional information is available at www.rossstores.com.

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Source: Ross Stores, Inc.

Ross Stores, Inc.
Michael Hartshorn, 925-965-4503
Executive Vice President,
Chief Financial Officer
or
Connie Kao, 925-965-4668
Vice President, Investor Relations
connie.kao@ros.com