• Q3 profit up 11% to $159.5m
  • Sales increased 11% to $2.26bn
  • Operating margin rose 35 basis points to 11.3%  

Strong sales and lower expenses have helped off-price retailer Ross Stores book a better-than-expected rise in third-quarter net profit, but it issued a cautious outlook for the all-important holiday season.

Net earnings increased 11% to US$159.5m during the quarter ended 27 October, compared to $144m the prior year. The clothing and footwear retailer, which operates 1,097 stores with sales up 11% to $2.26bn and comparable store sales climbing 6%.

Operating margin rose about 35 basis points to 11.3% as a result of higher merchandise margin, lower distribution costs and leverage on occupancy and general, selling and administrative expenses.

However looking ahead, Michael Balmuth, vice chairman and chief executive officer, said: "During the holiday season it is always difficult to predict how promotional other retailers may become or how current macro-economic and political uncertainties may impact consumer spending.

"We are also anniversarying the robust 7% increase in same store sales from last year's fourth quarter. So, while we hope to do better, we believe it is prudent to maintain our prior fourth quarter guidance."