Ross Stores Q1 Profit Beats Expectations

reported stronger-than-expected earnings for the first quarter on Thursday. The Dublin, California-based company posted a quarterly profit of $282.2 million, or $1.37 per share, versus a year-ago profit of $243.9 million, or $1.15 per share. Excluding items, the company's adjusted earnings came in at $1.33 per share. Its sales climbed 10 percent to $2.94 billion. However, analysts were expecting earnings of $1.28 per share on revenue of $2.89 billion. The average estimate among 17 Estimize users was for earnings of $1.31 per share and revenue of $2.90 billion. Its comparable store sales gained 5 percent in the quarter. During the quarter, the company repurchased 1.7 million shares of common stock for a total price of $176 million. Barbara Rentler, Chief Executive Officer, said, "We are pleased with our better-than-expected sales and earnings in the first quarter. Our results continue to benefit from value-focused customers responding favorably to our fresh and exciting assortments of name brand bargains. Operating margin for the first quarter grew to 15.7%, up from 14.6% in the prior year, driven by a combination of higher merchandise margin, strong expense controls, and the aforementioned favorable timing of packaway-related costs." For the second quarter, Ross projects earnings of $1.19 to $1.24 per share, on same-store sales growth of 2 percent to 3 percent. Adjusting for the 2-for-1 stock split that becomes effective in June, the company expects earnings of $0.59 to $0.62 per share. For fiscal 2015, the company expects earnings of $4.72 to $4.87 per share. On a split-adjusted basis, Ross Stores, projects earnings of $2.36 to $2.44 per share. Ross Stores shares rose 0.43 percent to $101.99 in the after-hours trading session.