PLEASANTON, Calif.-Strong sales growth helped propel Ross Stores to a powerful 21 percent increase in net income in the first quarter, to $208.6 million.
Net sales rose 14 percent to $2.4 billion in the quarter, which ended on April 28. This included a healthy 9 percent pickup in same-store sales. Michael Balmuth, Ross’ vice chairman and CEO, attributed the chain’s gains to its ability to offer name-brand merchandise to value-focused shoppers, and to favorable weather throughout its markets during the quarter.
The sales increase helped improve Ross’ key expense ratios as well. Gross margin increased 16 basis points to 28.8 percent. Selling, general and administrative expenses—while jumping 9.3 percent in dollars—dropped 57 basis points as a percentage of sales to 14.3 percent.
For the second quarter, Balmuth said, Ross is expecting same-store sales to rise from 3 to 4 percent. The company has also raised its long-term projected store-count potential to 2,500 locations in the United States. “Our current research and proven ability to cluster stores closer together indicate that we can more fully saturate existing and new markets,” Balmuth said.