NEW YORK — Higher sales and cost controls paved the way for off-price retail chain Ross Stores to report a 9.9 percent gain in its second-quarter profits.
For the three months ended Aug. 2, the Newark, Calif.-based firm said it earned $54.6 million, or 70 cents a diluted share, matching Wall Street’s expectations. Last year, the company reported earnings of $49.7 million, or 62 cents. Sales for the quarter notched up 10.1 percent to $965.6 million from $876.9 million and comparable-store sales were flat on top of a 9 percent increase in the prior year.
In a statement, Michael Balmuth, chief executive, said that, in addition to sales that fell in line with the company’s plan, “Effective control of both inventories and expenses throughout the second quarter also contributed to respectable earnings growth for the period.”
In reporting a 2 percent increase in July comps earlier this month, Ross forecast earnings of 70 cents for the now-completed second quarter, which was at the upper end of its June forecast of 66 to 70 cents.
The company said earlier that it is anticipating third-quarter earnings between 64 and 66 cents, compared with 57 cents last year, on comp growth of between 3 and 4 percent. It also said it expects fourth-quarter earnings to fall between 85 and 88 cents, compared with 74 cents in the year-ago period, and estimated comps to increase between 3 and 4 percent.
Consistent with its long-term plan for 12 percent annual unit growth, Ross expects to add 61 locations in 2003, to end the current year with 568 stores. He also noted its new Perris, Calif., distribution center is expected to open as planned in September.
For the six-month period, earnings increased 6.7 percent to $103.9 million, or $1.33 a diluted share, from $97.4 million, or $1.21, in the prior year. Sales for the first half rose 8.7 percent to $1.85 billion from $1.70 billion, with same-store sales down 1 percent on top of a 10 percent gain in the prior-year period.