Ross Stores Inc. (NASDAQ:ROST) hit estimates with its second-quarter earnings, though revenue fell short and the company offered a cautious outlook for the second half, causing shares to fall.
The second largest off-price retailer in the US posted net earnings of $129.3 million, or $1.07 a share, up 25% from $103.4 million, or 82 cents a share, in the same quarter last year, and matching average analyst estimates in a Thomson Reuters poll.
Revenue for the Pleasanton, California-based company was $1.9 billion, compared with $1.8 billion a year ago, and slightly below the Street’s view of $1.92 billion.
Ross CEO Michael Balmuth said the company is “pleased” with the results, attributing them to “solid sales gains and healthy earnings increases.”
“Our profit growth for both periods is especially noteworthy, considering it was on top of robust double digit gains in the prior year,” he said, highlighting “compelling bargains” as a primary revenue driver.
The company is on track to repurchase this year approximately $375 million of its current two-year, $750 million buyback program, Balmuth said.
The company chose to maintain a somewhat cautious outlook regarding its sales and earnings targets for the second half of the year, expecting earnings to be in the range of $1.15 to $1.20 a share.