PLEASANTON, Calif.–A healthy sales increase and checks on expenses helped Ross Stores to a 21.5 percent pickup in net income in its first quarter, to $173 million.
Net sales for the quarter, which ended on April 30, finished up 7.2 percent to $2.1 billion, including an increase of 3 percent in same store sales. Gross margin added on 127 basis points to 28.6 percent, thanks to higher merchandise margins and lower occupancy and distribution expenses. Although selling, general and administrative expenses increased by 5 percent in dollars, they were down 32 basis points as a percentage of sales to 14.9 percent, due to reduced store operating costs and in other operating expenses.
Michael Balmuth, Ross’ vice chairman and CEO, noted that the retailer posted these gains on top of some difficult comparisons from last year’s first quarter. In that time frame, Ross’ net income jumped 56 percent, net sales were up 14 percent and same-store sales rose 10 percent.