Ross Stores Q2 sales and earnings decline

Ross Stores, Inc. reported second quarter earnings per share of 1.11 dollars on net income of 385 million dollars compared to 1.39 dollars per share on net earnings of 494 million dollars for the same quarter last year.

Sales for the quarter were 4.6 billion dollars versus 4.8 billion dollars in the prior year period. Comparable store sales were down 7 percent on top of a 15 percent gain in the second quarter of 2021, which was the strongest period of last year.

Commenting on the results, Barbara Rentler, the company’s CEO, said: “We are disappointed with our sales results, which were impacted by the mounting inflationary pressures our customers faced as well as an increasingly promotional retail environment.”

Review of Ross Stores’ H1 performance

For the six months ended July 30, 2022, earnings per share were 2.08 dollars on net income of 723 million dollars compared to 2.73 dollars per share on net earnings of 971 million dollars in the first half of 2021.

Sales for the period were 8.9 billion dollars, with comparable store sales down 7 percent versus a 14 percent gain in the first half of 2021.

Ross Stores reveals H2 and FY22 guidance

Looking ahead, Rentler added: “While we hope to do better, we are now planning third quarter same store sales to decline 7 percent to 9 percent versus a strong 14 percent gain last year. For the fourth quarter, same store sales are forecast to be down 4 percent to 7 percent on top of a 9 percent increase for the same period a year ago.”

“If the second half performs in line with these updated sales assumptions, earnings per share for the third quarter are projected to be 72 cents to 83 cents versus 1.09 dollars last year and 1.04 dollars to 1.21 dollars for the fourth quarter, compared to 1.04 dollars in 2021. Based on our first half results and second half guidance, earnings per share for fiscal year 2022 are now planned to be in the range of 3.84 dollars to 4.12 dollars versus 4.87 dollars last year,” she further said.