Off-price retailer Ross Stores has reported a slight fall in third-quarter earnings, despite stronger-than-expected sales.

Third-quarter earnings fell to $36.3 million from $37.7m in the year-earlier period.

Quarterly sales grew 20 per cent to $1.2 billion from $1.0bn last year, while same-store sales were up 9 per cent.

Michael Balmuth, vice chairman, president and chief executive officer, said: "Sales during the third quarter were stronger than expected, benefiting from broadbased geographic strength and solid same-store sales gains in our back-to-school businesses."

Balmuth said gross margin had declined, mostly due to an increase in inventory shortage.

The company remains "cautiously optimistic" for the forthcoming Christmas season.