Ross Stores ups FY guidance as Q2 sales, profits rise

US retailer Ross Stores has upped its full-year sales and earnings outlook after a better-than-expected Q2 performance.

The discount department store chain reported a 7.7 percent increase in sales to 4.9 billion dollars in the three months ended July 29.

Comparable store sales were up 5 percent, compared to a drop of 7 percent in the prior-year period. It had expected same-store sales to be relatively flat in the second quarter.

The retail group made a Q2 net profit of 446 million dollars, up from 385 million dollars the prior year.

Ross Stores ups guidance

“We are pleased with our second quarter results, with both sales and earnings well above our expectations,” said CEO Barbara Rentler in a statement.

“Along with easing inflationary pressures, customers responded well to our improved value offerings throughout our stores,” she said.

The company’s second quarter operating margin remained flat at 11.3 percent.

“Despite the recent moderation in inflation, our low-to-moderate income customer continues to face persistently higher costs on necessities,” Rentler said.

Accordingly, the company has raised its full-year sales and profit outlook.

It now expects same store sales for the year ending January 27, 2024 to be 2 percent to 3 percent higher than the prior year. It had previously expected sales to be relatively flat.

The retailer now expects FY23 earnings per share (EPS) in the range of 5.15 dollars and 5.26 dollars versus 4.38 dollars last year. It previously expected FY23 EPS to be in the range of 4.77 dollars and 4.99 dollars.