Ross Stores has better-than-expected Q2

PLEASANTON, Calif. — Ross Stores credited strong sales and merchandise gross margin for its better-than-expected results for the second quarter ended Aug. 3.

The company reported earnings per share of $.98, up from $.81 for the prior-year quarter — a 21% increase on top of a 27% gain in last year's second quarter. Net earnings for the 2013 second quarter grew to $213.1 million, up 17% from $182 million in the prior year.

Second quarter sales were $2.6 billion, up 9% from $2.3 billion in the second quarter of 2012. Comparable store sales for the period rose 4% compared with the prior-year period.

"Operating margin for the second quarter grew to a record 13.6%, up from 12.8% in the prior year,” said Michael Balmuth, vice chairman and CEO. “This increased level of profitability was driven by a 70 basis point improvement in cost of goods sold, mainly due to higher merchandise gross margin, and a 10 basis point decline in selling, general and administrative expenses."

Despite the better-than-expected results, Ross is maintaining a cautious outlook for the remainder of the year because of the ongoing uncertainty in the macro-economic environment, as well as the potential for a more promotional and competitive retail climate.