Ross Stores beat first-quarter Wall Street estimates, but company executives said macroeconomic headwinds continued to squeeze the retailer’s top-line performance.
Net earnings were $488 million, or $1.46 per diluted share, versus $371.2 million, or $1.09 per diluted share, in the year-earlier period.
Ross topped a Yahoo Finance-published analyst consensus estimate for earnings of $1.34 and revenue of $4.83 billion.
Comparable sales gained 3% in the quarter year over year, the company stated.
Net sales were $4.86 billion versus $4.49 billion, in the year-earlier period.
In a conference call, Michael Hartshorn, Ross’ group president and chief operating officer, said accessories and cosmetics were the retailer’s best performers in the quarter. Shoes performed above the chain average, home was in line, and apparel trailed.
During the call, Barbara Rentler, Ross CEO, said, the company’s Ross Dress for Less unit outperformed its dd’s Discounts division. The results reflected an economy in which inflationary pressures continue to have a larger impact on the lower-income householders among dd’s prime shoppers.
In announcing the financial results, Rentler said, “Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending. Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan. Operating margin of 12.2% rose 205 basis points compared to 10.1% in last year’s first quarter. This improvement was primarily driven by lower distribution, incentive, and freight costs that were partially offset by the planned decline in merchandise margin.”
