Ross Stores on home: There’s still room to grow

Dublin, Calif – Like its primary off-price rival, Ross Stores beat expectations during the third quarter – though home was not quite as much of a stand-out.

Home, which has been a strong performer for Ross in recent quarters, generated same-store sales in line with the overall company during the third quarter. But Ross has no plans to cede ground.

“We still feel good about home,” ceo Barbara Rentler told analysts during yesterday afternoon’s quarterly call. “We feel like we’re well-positioned for holiday for the fourth quarter, and we feel that in the future – ’16, ’17 – there is still room to grow there.”

Given the uncertain macroeconomic environment and a high-promotional holiday season just ahead, the company’s outlook remains conservative for the near term. During last year’s fourth quarter, Ross put up some strong numbers – including a 6% comp increase – that will make for tough comparisons, she noted.

During the third quarter ended Oct. 1, Ross drove increases in both traffic and the size of the average basket. Sales rose 7% to $2.78 billion, with comps up 3% on top of last year’s 4%.

Net earnings climbed 12% to $216 million, with earnings per share up 15% to $0.53.

Year to date, net earnings increased 12% to $757 million, and EPS jumped 15% to $1.85. Sales were up 8% to $8.69 million, with comps up 4%.