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Reuters
Published
May 20, 2011
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Ross Stores forecast disappoints, shares slip

By
Reuters
Published
May 20, 2011

May 19 - Off-price store chain Ross Stores Inc reported a higher quarterly profit as shoppers continued to seek out top brands at discount prices, but it didn't increase its earnings forecast enough for Wall Street's liking, sending shares down.

Ross Stores
From Ross' shoes and accessories collection

Ross, which like its larger rival TJX Cos Inc, sells designer clothing brands at lower prices by buying merchandise that department stores return to vendors.

Both chains were among the big winners during the recession, but have had to contend with improving sales at department stores this year.

Ross reported net income of $173 million, or $1.48 per share, in line with analyst estimates, on sales of $2.1 billion. That's up 21.6 percent from $142.3 million, or $1.16 a share, a year earlier.

Ross raised its profit forecast for the fiscal year ending in January 2012 and now expects to earn $5.16 to $5.31 per share. But that was below the $5.36 Wall Street analysts were expecting, according to Thomson Reuters I/B/E/S.

Its current quarter profit forecast of $1.15 to $1.20 per share was also below Wall Street forecasts of $1.27.

Total sales rose 7.2 percent while sales at stores open at least a year rose 3 percent. For the current quarter, which ends in late July, Ross expects same-store sales to rise 2 percent to 3 percent.

Shares were down $1.22, or 1.5 percent, to $80.64 in late morning trading on Nasdaq.

(Reporting by Phil Wahba, editing by Dave Zimmerman)

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