Ross Stores Profit Rises 13%

By Tess Stynes 

Ross Stores Inc. said its earnings rose 13% in the three months ended October as the off-price retailer benefited from better-than-expected revenue growth and stronger margins.

Shares rose 3.5% to $67.85 in recent after-hours trading as the results beat expectations and the company raised its annual guidance.

For the year ending in January, Ross Stores projected per-share earnings of $2.78 to $2.81, compared with its previous estimate for per-share profit of $2.69 to $2.75.

For the holiday quarter, the company forecast per-share earnings of 72 cents to 75 cents, mostly below estimates of analysts polled by Thomson Reuters for per-share profit of 75 cents.

Off-price retailers such as Ross Stores and TJX Cos. -- parent of T.J. Maxx and Marshalls -- have been faring better than department stores as consumers have remained price-conscious.

For the period ended Oct. 29, Ross Stores' comparable sales -- or sales at stores open more than 14 months -- rose 7%.

In all, Ross Stores reported a profit of $244.5 million, or 62 cents a share, up from $215.7 million, or 53 cents a share, a year earlier. The company expected per-share profit of 52 cents to 55 cents.

Revenue increased 11% to $3.09 billion. Analysts expected revenue of $2.96 billion, according to FactSet.

Operating margin rose 0.55 percentage point to 12.6%, mostly on stronger merchandise margins.

On Tuesday, rival TJX Cos. and other off-price chains, reported better-than-expected results for the three months ended in October, though the company's guidance for the holiday quarter fell short of expectations.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

November 17, 2016 17:29 ET (22:29 GMT)

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