Ross Stores Inc. saw its earnings and sales rise last year while its department store competitors found their businesses sagging.
For the full year, Ross increased net earnings by 10 percent to $1.1 billion on a sales gain of 8 percent, to $12.9 billion. Results for the fourth quarter of 2016 were also up over the previous year, with net earnings increasing 14 percent to $301 million and sales rising 4 percent to $3.5 billion.
Ross chief executive officer Barbara Rentler said the results are “better than expected,” both for the year and the fourth quarter, “especially given our strong multiyear comparisons and the highly competitive and promotional holiday season.”
“Our results continued to benefit from our ability to offer customers great values on a wide assortment of gifts and fashions for the family and the home,” Rentler said.
The ceo went on to point to the company’s operating margin, which grew to 13.6 percent from 12.7 percent during the fourth quarter and to 14 percent for the year, a company record. She said the improvement was “mainly driven by our above-plan sales” and reduced costs.
The off-pricer also said its board authorized a repurchase of $1.75 billion of common stock over the next two years. At “recent” stock prices, the repurchase program represents about 6 percent of Ross’s total stock.
In January, Ross completed a prior two-year repurchase program for $1.4 billion in common stock.
Looking ahead to 2017, Rentler said “uncertainty in the political, macroeconomic and retail climates” will continue. That has the ceo hoping for still-better results, but finding it “prudent to remain somewhat cautious in planning our business for the 2017 fiscal year.”
Ross expects same-store sales to grow by 1 to 2 percent this year, compared with the 4 percent growth seen in 2016. Earnings per share are expected to hit between $3.05 and $3.15 for the fiscal year, a rise of 7 to 11 percent.
Consumers have been flocking to off-pricers like Ross and competitor TJ Maxx in recent years, searching there for both deals and national brands to the detriment of most other retailers.