PLEASONTON, Calif. (AP) — Ross Stores Inc. on Thursday reported a sales figure that topped Wall Street expectations, and the discount store operator raised its outlook for third-quarter earnings.
The Pleasanton, Calif.-based company said revenue at locations open at least a year rose by 5 percent for the five weeks ended Sept. 29. Analysts polled by Thomson Reuters had expected an increase of 4.3 percent, on average.
The measure is a key indicator of health because it strips out the impact of newly opened and closed locations.
Total sales for the period rose 10 percent to $800 million, the company said.
CEO Michael Balmuth said the performance was driven by the company's variety of name-brand bargains that resonate with value-focused consumers. Earnings per share for the current quarter are now expected to be in the range of 70 cents to 71 cents, up from the previous guidance of 63 cents to 66 cents.
The rosier outlook is partly the result of improved gross margins in August and September, the company said.
Looking ahead, Ross Stores stood by its outlook for sales at established locations to be up 3 percent to 4 percent in October. Earnings per share for the quarter ending Feb. 2 are expected to be 99 cents to $1.04.
Analysts surveyed by FactSet forecast earnings per share of 69 cents for the third quarter and $1.04 per share for the fourth quarter.
Ross has more than 1,000 locations in 33 states, the District of Columbia and Guam.
Shares of Ross Stores fell 76 cents to $65.92 in morning trading.