PLEASANTON, Calif.-Healthy gains in both sales and margins provided the fuel for a 12.5 percent increase in first-quarter net income, to $234.6 million, for Ross Stores.
Net sales gained 7.8 percent to $2.5 billion in the quarter, which ended on May 4. This included a 3 percent pickup in same-store sales. Michael Balmuth, Ross’ vice chairman and CEO, said the increases on both the top and bottom lines were better than the company expected, and the results “continue to be driven by our ongoing ability to offer terrific bargains to today’s value-oriented consumers.”
Gross margin provided more growth to net profit by increasing 42 basis points to 29.2 percent. Selling, general and administrative expenses rose 7.2 percent in dollars, but were down eight basis points as a percentage of sales to 14.3 percent. In addition, Ross slashed its interest expense by 91 percent.
Looking ahead, Balmuth said the company expected second-quarter same-store sales to rise 1 to 12 percent.