Off-price retailer Ross Stores is not slowing down its store growth anytime soon.
Speaking on the chain’s quarterly call with investors, CEO Barbara Rentler said that Ross’ 2019 expansion program is on schedule with the recent addition of 22 new Ross and six dd’s Discounts locations.
“We remain on track to open a total of approximately 100 locations in 2019, comprised of 75 Ross and 25 dd’s Discounts,” she added.
In its first quarter, ended May 4, Ross’ net earnings totaled $421 million, or $1.15 a share, compared to $418 million in the prior year. Analysts had expected earnings of $1.11 a share.
Sales rose 6% to $3.79 billion, missing analysts’ forecasts of $3.81 billion. Comparable store sales increased 2%.
“For the first quarter, we delivered sales gains at the high end of our guidance as well as better-than-expected earnings per share growth despite continued underperformance in ladies apparel,” said Barbara Rentler, CEO.
On the call, Rentler discussed the miss in women’s apparel.
“Our execution in this important business remains below our standard and consequently we did not offer our customers the compelling values they have come to expect from us,” she said. “We're working diligently to improve the assortments in this important area,” she said. “But it's going to take time to complete -- address all the issues for a chain of our size. That said, we believe that we will see improved performance as we move through the year.”
Ross’ operating margin of 14.1% was down from the prior year, but it was above plan mainly due to higher merchandise margin.
“As expected, this improvement was more than offset by increases in freight and wage costs and the timing of packaway-related expenses that benefited the prior year period,” Rentler stated”
As of May 4, 2019, the company operated 1,502 Ross stores locations in 38 states, the District of Columbia, and Guam, and 243 dd’s Discounts stores in 18 states.