NEW YORK — Strict inventory controls and solid same-store sales growth drove robust gains in quarterly profits at three off-price retailers, while a fourth chain in the discount segment saw its loss widen.
A firm full-price business at department stores, coupled with a pickup in new store openings, also stoked the income increases.
Off-pricers undertaking aggressive expansion plans — 313-unit Ross Stores and 93-door Value City Department Stores — doubled their earnings in the most recently completed quarter.
In addition, double-digit same-store sales growth fed a return to profit at 317-store MacFrugal’s Bargain Closeouts, but One Price Clothing saw the loss at its 661 stores widen in the fiscal period.
Third-quarter earnings at Ross rocketed to $16.4 million, or 64 cents a share, from $7.9 million, or 32 cents, a year ago. Sales soared 22 percent to $403 million from $331 million, boosted by a 14 percent surge in comparable-store sales.
The strongest performances at the Newark, Calif.-based chain were notched by home accents and bed and bath, according to a spokeswoman. Apparel sales were particularly strong in women’s special sizes, and in men’s and children’s.
In October, Ross opened 13 new stores including eight units in existing markets. The firm also acquired lease rights from TJX Cos. in late July for five former Marshalls sites in Hawaii, which are operating under the Ross name.
Ross’s best results in the third quarter came from its stores in Southern California and in Texas, particularly Dallas, the spokeswoman noted.
For the nine months, profits at Ross more than doubled to $48.9 million, or $1.89 a share, from $22.1 million or 89 cents. Sales jumped 21 percent, totaling $1.18 billion, versus $979 million. Same-store sales surged 12 percent in the period ended Nov. 2.
Michael Balmuth, chairman and chief executive officer, said in a statement that the same-store growth, along with improvements in gross margin and cost controls, pushed operating margin to 6.7 percent for the third quarter, from 4.1 percent.
Better inventory controls also have benefited Ross’s business, Balmuth said, noting: “The increase in total consolidated inventories at the end of the period was planned to fund new store growth.” Ross’s inventory grew by an on-plan 7 percent, totaling $401.8 million, against $344 million a year ago.
Value City, which opened seven new stores in its fiscal first quarter, netted $5.7 million, or 18 cents a share, versus $2.5 million, or 8 cents a share a year ago. Sales in the period ended Nov. 2 climbed 22.2 percent to $266.1 from $217.8. Same-store sales were up 2.3 percent.
Jay Schottenstein, chairman and chief executive officer, said in a statement the new stores are exceeding sales projections. Value City’s typical new store generates sales of $12 million to $13 million annually.
Citing a good performance across the board, MacFrugal’s Bargain Close-outs returned to third-quarter profits of $5.1 million, or 20 cents a share. A year earlier, the Dominguez, Calif.-based chain had a loss of $16 million, after a charge of $35 million to liquidate inventory. Sales for the three months ended Oct. 27 gained 14.5 percent to $174.5 million from $152.4 million. Comps climbed 11 percent, with the big lift coming from a 14 percent leap in October.
Nine-month net totaled $11.6 million, or 45 cents a share, against a loss of $9.4 million. Sales rose 8.4 percent to $491.6 million from $453.4 million, and comps grew 3.4 percent.
Philip L. Carter, chief executive officer, said lower costs and higher gross margin, as well as the comp-store growth, put MacFrugal’s back in the black. He added that he does not expect November results to be as strong because the post-Thanksgiving sales surge will occur in the December period this year, rather than the November period, as they did in 1995.
At One Price Clothing, based in Duncan, S.C., the third-quarter loss widened to $2.8 million from $2.3 million a year ago. Sales slid 8 percent to $63.9 million, from $69.5 million. Same-store sales slumped 7 percent.
In the nine months, profits rose to $1.4 million, or 14 cents, from $1.3 million, or 13 cents. Sales edged up 1.9 percent to $227.6 million from $223.3 million, but same-store sales slid 3 percent.
During the latest quarter. One Price opened three stores and closed six. At the same time last year, One Price had 29 fewer stores than the 661 it now operates.

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