US: Ross Stores records "strong" Q1 performance
- Q1 earnings up 4%
- Operating margin down 25 bps
- Sales increase 6%
Ross Stores said its Q1 earnings performed at the high end of its guidance
Ross Stores has booked what analyst say was a strong performance in the first quarter as strict inventory and expense control offset the negative impact from unfavorable weather and a challenging retail environment.
The off-price fashion retailer recorded net earnings of US$243.9m in the three months ended 3 May, up 4% from $234.6m in the prior year. Results were in-line with Stifel analyst estimates and at the high end of management guidance.
Operating margin for the quarter was better than forecast, declining 25 basis points to 14.6%.
First quarter sales increased 6% to $2.681bn, up from $2.54bn in the prior year quarter. Comparable store sales rose 1%.
CEO 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."
For its second-quarter, the company has established EPS guidance of $1.05-$1.09, in-line with analyst consensus and Stifel's estimate of $1.08.
Analyst Richard Jaffe noted: "Unseasonably cool weather, which held back consumers' desires for warm weather merchandise created a challenging retail environment. However, management was able to flow inventories strategically, feeding regions and categories where trends were stronger and maintaining lean inventories where business was softer. This limited the negative impact to gross margin. We believe this highlights the ongoing resilience and competitive strength of the off-price business model."
Value and individualism were top priorities for apparel consumers in 2013 and they proved this with their spending habits. Consumers flocked to retailers like Ross Stores and TJX where they are able ...
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