Higher traffic drives growth for Ross Stores

Stronger traffic and an increase in the size of the average basket are among the reasons Ross Stores’ CFO cited for the company's robust fourth quarter performance.

Michael J. Hartshorn, senior vice president, chief financial officer of Ross Stores, said in a conference call that the retailer’s earnings per share were $1.20 for the fourth quarter ended Jan. 31, up 18% from $1.02 in the prior year. Net earnings grew to $249 million, up from $218 million for the same period last year. Sales for the fiscal 2014 fourth quarter rose 11% to $3.033 billion, with same store sales up 6% over the prior year.

Barbara Rentler, CEO of Ross Stores, said: "We are pleased with our fourth quarter sales and earnings, both of which were well ahead of our expectations, as our value offering on a wide assortment of name brand bargains and gifts resonated well with our customers. Our 2014 fourth quarter operating margin grew 45 basis points to 13.1%, benefiting from slightly higher merchandise gross margin and leverage on expenses from our robust comparable sales gain."

For the fiscal year ended Jan. 31, earnings per share were $4.42, up 14% from $3.88 for fiscal 2013. Net earnings rose to $925 million, compared to $837 million in the prior year. Sales for the 2014 fiscal year grew 8% to $11.042 billion, with same store sales up 3% over fiscal 2013.

"As we enter 2015, we continue to face ongoing uncertainty and volatility in the macro-economic and retail climates,” Rentler said. “While we hope to do better, based on these external factors and our own challenging multi-year sales and earnings comparisons, we are remaining somewhat cautious in our outlook."

For fiscal 2015, the company is forecasting same store sales to grow 1% to 2% and earnings per share of $4.60 to $4.80, up from $4.42 in fiscal 2014.

Hartshorn said the company intends to open 70 new Ross stores and 20 new DD’s Discounts stores in 2015.