Ross Stores beats by $0.06, reports revs in-line; guides OctQ EPS in-line; guides JanQ a bit below consensus
Reports Q2 (Jul) earnings of $1.14 per share, $0.06 better than the Capital IQ Consensus Estimate of $1.08; revenues rose 7.0% year/year to $2.73 bln vs the $2.71 bln consensus. Co issues in-line guidance for Q3 (Oct), sees EPS of $0.83-0.87 vs. $0.86 Capital IQ Consensus Estimate. Co issues downside guidance for Q4 (Jan), sees EPS of $1.05-1.09 vs. $1.12 Capital IQ Consensus Estimate. Co issues in-line guidance for FY15, sees EPS of $4.18-4.26 vs. $4.21 Capital IQ Consensus Estimate.
"Our second quarter sales performed at the high-end of our expectations as today's value-focused consumers continued to respond to our wide assortment of competitive name brand bargains. Merchandise gross margin was above plan, which coupled with strong expense controls, enabled us to deliver quarterly earnings per share that were above the high end of our guidance."
Operating margin grew to a record 14.3%, up from 13.6% in the prior year. This increased level of profitability was driven by a 25bp improvement in cost of goods sold, mainly due to higher merchandise gross margin, and a 45bp decline in SG&A.