• Q4 profit down 7.9% to $218m
  • Sales slip 0.7% to $2.74bn 
  • Comparable store sales up 2%

Off-price fashion retailer Ross Stores has reported a 7.9% drop in fourth-quarter profit, weighed down by lower sales and promotions.

Net earnings reached US$218m for the 13 weeks to 1 February, compared to $236.6m in the same period of the prior year. Sales edged down 0.7% to $2.74bn from $2.76bn last year, while comparable store sales climbed 2%.

Vice chairman and CEO Michael Balmuth said: "Our fourth quarter sales performed in line with our guidance, with earnings that were slightly better-than-expected primarily due to above-plan merchandise gross margin. 

"Despite a very promotional retail environment throughout the holiday season, customers responded favourably to the compelling bargains we offered on a wide assortment of fresh and exciting name brand fashions and gifts."

During the full year, however, earnings increased 6.4% to $837.3m from $786.8m in the prior year period, while sales reached $10.23bn, up 5.2% from $9.72bn.

The company expects fiscal 2014 earnings per share to be $4.05-4.21, up from $3.88 in fiscal 2013, and sales are forecast to grow 1% to 2%.

"As we enter 2014, in addition to our own challenging multi-year sales and earnings comparisons, we also continue to face ongoing uncertainty in the macro-economic and retail climates," Balmuth added. 

"While we remain well-positioned as an off-price retailer, these likely headwinds have prompted us to stay somewhat cautious in our outlook."