Ross Sales Up, Boosts Outlook - Analyst Blog
04 2월 2012 - 12:57AM
Zacks
The largest off-price apparel and home fashion chain in U.S.,
Ross Stores Inc. (ROST) came out with
stronger-than-expected sales and same store sales numbers for the
month of January, as well as for the fourth quarter of fiscal
2011.
Ross Stores’ same-store sales for the four weeks ended January
28, 2012 grew 5% compared with a rise of 3% and 8% recorded for the
same period in 2010 and 2009, respectively. The company’s
same-store sales for the fourth quarter surged 7% versus an
increase of 4% and 10% posted in the fourth quarter of 2010 and
2009, respectively.
For fiscal 2011, the company’s same store sales was up 5%, flat
with the 2010 same store sales and down from an increase of 6%
reported in 2009.
Ross Stores’ sales in January 2012 jumped 10% from the year-ago
comparable period (four weeks ended January 29, 2011). Net sales in
January reached $483 million versus $441 million reported last
year.
For the fourth quarter of fiscal 2011, Ross Stores reported net
sales of 2.398 billion, representing an increase of 12% from $2.145
billion in the year-ago period. The company’s full-year sales were
up 9% to $8.608 billion from $7.866 billion for fiscal 2010.
Among the merchandise categories, the company’s Juniors, Shoes
and Children’s categories showed remarkable performances in
January, driving sales and same-store sales results for the month.
Region-wise, the company witnessed substantial growth in Florida
and the Mid-Atlantic regions.
The good performance in January and for the fourth quarter
together with the company’s strong financial position drove
management to announce its 18th consecutive annual dividend hike,
raise its fourth quarter and fiscal 2011 earnings per share targets
and initiate first quarter and fiscal 2012 same store sales and
earnings guidance.
Ross Stores declared a quarterly dividend of 14 cents per share,
representing an increase of 27% from the previous dividend. The
raised dividend is payable on March 30, 2012, to shareholders of
record as of February 17, 2012.
The company’s policy of constantly raising dividends and buying
back shares not only illustrates its strong financial and cash flow
position, but also shows its focus on improving shareholder
returns.
During fiscal 2011, the company bought back nearly 11.3 million
shares at a total cost of $450 million. The company currently has
an authorization worth $450 million remaining under its share
repurchase program, which it plans to complete in fiscal 2012.
Following the encouraging January sales results, Ross Stores has
also increased its fourth quarter earnings per share guidance to 84
cents – 85 cents, representing a 22% to 23% increase from the 69
cents per share earned in the fourth quarter of fiscal 2010. In
December 2011, the company had raised its earnings guidance in the
range of 82 cents - 83 cents per share.
The increase in fourth quarter guidance resulted in the
company’s earnings per share forecast for fiscal 2011, now shifting
to a range of $2.85 to $2.86 with an expected growth rate of 23% to
24%, compared with $2.31 per share reported in fiscal 2010.
The current Zacks Consensus Estimate for the fourth quarter and
fiscal 2011 are 84 cents per share and $2.85 per share,
respectively, which are both at the lower end of the company’s
revised guidance.
Further, anticipating the fiscal 2011 gains to continue into
2012, the company stated that its same store sales for fiscal 2012
(52 weeks ending January 26, 2013) will grow in the 1% to 2% range,
compared to 5% gains in the prior two years.
The company’s earnings per share guidance for fiscal 2012 (53
weeks ending February 2, 2013), including one additional week, is
in the range of $3.12 to $3.27, representing a growth rate of 9% to
14%. The company expects the additional week to add about 8 cents -
9 cents per share to 2012 earnings per share. The Zacks Consensus
Estimate of $3.20 per share for fiscal 2012 is near the mid-point
of the company’s forecast.
For the first quarter of fiscal 2012, the company expects same
store sales to increase 1% to 2%, compared with gains of 3% and 10%
recorded in the first quarter of 2011 and 2010, respectively.
Earnings per share for the first quarter will be in the range of 82
cents - 86 cents, with an expected growth rate of 11% to 16% from
74 cents earned in the first quarter of 2011. The current Zacks
Consensus Estimate for first quarter 2012 is 84 cents per share,
which is at the mid-point of the company estimated earnings per
share.
Ross Stores is scheduled to release its February 2012 sales on
March 1, 2012, followed by the fourth quarter and fiscal 2011
results on March 15, 2012.
Ross' shares maintain a Zacks #2 Rank, which translates into a
short-term Buy rating. Our long-term recommendation on the stock
remains Outperform. The company primarily competes with the likes
of Kohl's Corp. (KSS), The TJX Companies
Inc. (TJX) and Wal-Mart Stores Inc.
(WMT).
KOHLS CORP (KSS): Free Stock Analysis Report
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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