Ross Stores, Inc. (NASDAQ: ROST) reported upbeat earnings for its first quarter, but issued a weak forecast for the current quarter.
The company based in Dublin, California reported earnings per share for the 13 weeks ended May 5, 2018 of $1.11, up from $.82 for the 13 weeks ended April 29, 2017. Net earnings for the 2018 first quarter were $418 million, compared to $321 million in the prior year.
These earnings per-share results include a 17-cent-per-share benefit from recently enacted tax legislation and a two-cent-per-share benefit from the favorable timing of packaway-related expenses that we expect to reverse in subsequent quarters.
First-quarter 2018 sales increased 9% to $3.6 billion. Comparable store sales grew 3% over the prior-year quarter. This compares to a same store sales gain of 3% for the 13 weeks ended April 29, 2017.
CEO Barbara Rentler commented, "Despite unfavorable weather throughout the period, we achieved above-plan growth in both sales and earnings in the first quarter. Operating margin for the period of 15.1% was down slightly from the prior year as an improvement in merchandise gross margin and favorable timing of packaway-related expenses were offset by higher freight costs and wage-related investments."
Looking ahead, Rentler said, "For the 13 weeks ending August 4, 2018 we are forecasting same store sales to be up 1% to 2% over the 13 weeks ended August 5, 2017. Second-quarter 2018 earnings per share are projected to be 95 to 99 cents."
Shares in Ross Stores swooned $4.81, or 5.8%, to $78.15
