Ross Stores (NASDAQ:ROST) reported Thursday a 15.5% surge in third-quarter profit, however investors far from cheered the results as they only matched expectations and the retailer maintained a cautious outlook.
The Pleasanton, Calif-based company posted net earnings of $121.3 million, or $1.02 a share, compared with $105.1 million, or 84 cents a share, in the same quarter last year, matching the Street’s view.
Revenue for the off-price retailer, which also operates dd’s Discounts, was $1.87 billion, up 7.5% from $1.744 billion a year ago, just ahead of average analyst estimates polled by Thomson Reuters of $1.85 billion.
Same-store sales rose by 3%, versus an 8% gain in the year-earlier period.
Michael Balmuth, Ross Stores’ chief executive, called the results “strong,” noting they came against already “outstanding gains” in the prior year.
“This performance is especially noteworthy considering the ongoing uncertainty in the macro-economic and retail environment,” he said. “Record operating margins in the third-quarter and year-to-day periods were driven by our continued ability to deliver exciting bargains while operating our business on lower inventories, as well as much better-than-expected shortage results.”
Despite the strong quarterly results, the chief executive said the company maintains a “cautious outlook,” as the holiday season is expected to “very competitive,” leading the company to reaffirm its fiscal guidance.