PLEASANTON, Calif.-An increase in sales helped Ross Stores to beef up its bottom line by 7.6 percent, to $171.6 million, in the third quarter ending on Nov. 2.
Net sales were up 6 percent to $2.4 billion, and included a same-store sales gain of 2 percent. Michael Balmuth, Ross’ vice chairman and CEO, said the sales total was in line with the retailer’s expectations, but earnings were better than expected due to an above-plan increase in merchandise gross margin. Gross margin picked up six basis points to finish the quarter at 27.2 percent.
Somewhat offsetting this gain, selling, general and administrative expenses rose 6.7 percent in dollars and 10 basis points as a percentage of sales, to 15.9 percent.
Looking to the fourth quarter, Balmuth said Ross is up against its own multiyear comparisons and a holiday-season retail environment that is projected to be among the intensely competitive and promotional in years. “As a result,” he said, “while we hope to do better, we believe it is prudent to adopt a more cautious outlook for the fourth quarter.”