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Tickers in this Article: ROST
Ross Stores (Nasdaq:ROST) announced its results for the most recent quarter on November 15, 2012. Ross Stores operates two chains of off-price retail apparel and home accessories stores in the United States and Guam.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers: Ross Stores' EPS fell in line with analyst expectations of 72 cents per share while revenue of $2.26 billion missed estimates of $2.34 billion. EPS rose 14.3% while revenue climbed 10.6% from the same period last year. Ross Stores' revenue has grown during each of the past four quarters on a year-over-year basis. Net income for the third quarter was $159.5 million. This is 10.8% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "We are pleased with the strong sales and earnings increases we generated in the third quarter and first nine months of 2012. Our better-than-expected results year-to-date were driven by our ongoing ability to offer shoppers a fresh and exciting array of compelling name brand bargains for the family and the home. In addition, operating our stores on lower inventories while strictly controlling expenses continues to enhance profit margins."

A Look Back: Net income has increased 18.3% year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed 22.8% from the year-earlier quarter.

The company's cost of sales rose to 72.9% of revenue, just 10.7% from the year-earlier quarter.

Looking Ahead: Expectations for the company's next-quarter performance are higher than they were 90 days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.04 per share from $1.03. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. Over the past three months, the average estimate for the fiscal year has climbed from $3.45 per to share to $3.50.

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