Ross Stores posts 13 percent jump in FY16 earnings

Ross Stores has reported earnings per share for the fourth quarter ended January 28, 2017 of 0.77 dollar, up 17 percent from the prior year, on net earnings that rose 14 percent to 301 million dollars. Sales for the quarter grew 8 percent to 3.5 billion dollars, with comparable store sales up 4 percent versus a 4 percent gain last year. For the fiscal year, earnings per share rose 13 percent to 2.83 dollars, while net earnings increased 10 percent to 1.1 billion dollars. Sales grew 8 percent to 12.9 billion dollars, with comparable store sales up 4 percent on a 4 percent increase in 2015.

Commenting on the company’s performance, Barbara Rentler, CEO, of Ross Stores said in a media release, “We are very pleased with our better-than-expected sales and earnings results for the fourth quarter and fiscal year, especially given our strong multi-year comparisons and the highly competitive and promotional holiday season.”

FY16 operating margin up 40 basis points

“Fourth quarter operating margin grew 90 basis points to 13.6 percent up from 12.7 percent in the prior year, mainly driven by our above-plan sales along with a favorable comparison of packaway-related costs versus last year’s fourth quarter. For the 2016 fiscal year, operating margin increased 40 basis points to a new record of 14 percent,” added Rentler.

The company’s Board of Directors authorized a new program to repurchase 1.75 billion dollars of its common stock over the next two fiscal years and also approved an increase in the quarterly cash dividend to 0.16 dollar per share, up 19 percent on top of a 15 percent increase in the prior year. This higher quarterly dividend is payable on March 31, 2017 to stockholders of record as of March 10, 2017.

Reveals cautious approach to fiscal 2017 outlook

Looking ahead, Rentler further said in the statement, “There continues to be uncertainty in the political, macro-economic, and retail climates, and we also face our own challenging sales and earnings comparisons. Thus, while we hope to do better, we believe it is prudent to remain somewhat cautious in planning our business for the 2017 fiscal year.”

For the 52 weeks ending January 27, 2018, the company is forecasting same store sales to grow 1percent to 2percent compared to 4percent last year. For the 53 weeks ending February 3, 2018, earnings per share are projected to be 3.02 dollars to 3.15 dollars, up 7 percent to 11 percent from 2.83 dollars in fiscal 2016. Incorporated in this guidance range is an estimated benefit to earnings per share of approximately 0.08 dollar from the 53rd week in fiscal 2017.

For the first quarter ending April 29, 2017, comparable store sales are forecast to be up 1 percent to 2 percent with earnings per share projected to be 0.76 dollar to 0.79 dollar, up from 0.73 dollar in the first quarter of 2016.

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