http://www.morningstar.com/earnings/32557874-ross-stores-inc-rost-q3-2011.aspx

Ross Stores Inc ROST
Q3 2011 Earnings Call Transcript

Transcript Call Date 11/17/2011

Operator: Good morning, and welcome to the Ross Stores Third Quarter 2011 Earnings Release Conference Call. The call will begin with prepared remarks by management, followed by a question-and-answer session.

Before we get started on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, and other matters that are based on the Company's current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today’s press release and the Company's fiscal 2010 Form 10-K and 2011 Form 10-Qs, and 8-Ks on file with the SEC.

Now, I'd like to turn the call over to Michael Balmuth, Vice Chairman and Chief Executive Officer.

Michael Balmuth - VC and CEO: Good morning. Thank you for joining us today. Also on our call are Norman Ferber, Chairman of the Board; Michael O'Sullivan, President and Chief Operating Officer; Gary Cribb, Executive Vice President, Stores and Loss Prevention; John Call, Senior Vice President and Chief Financial Officer; and Bobbi Chaville, Senior Director of Investor Relations.

We'll begin with a brief review of our third quarter performance, followed by our outlook for the remainder of the year. Afterwards, we'll be happy to respond to any questions you may have.

We are pleased with our above planned sales and earnings in the third quarter and first nine months of 2011, especially considering this growth was achieved on top of exceptional increases in the prior few years.

Our strong revenue gains continued to be driven mainly by our ability to deliver compelling bargains on a wide assortments of exciting name-brand fashions for the family and the home to today's increasingly value-focused consumers. In addition, operating our business on lower in-store inventories is driving fast returns and lower markdowns, which continues to benefit profit margins.

Third quarter earnings per share grew to $1.26 up from $1.02 for the same period last year. These results reflect the 24% increase on top of exceptional 21% and 91% gains in the third quarters of 2010 and 2009, respectively. Net earnings for the current year quarter grew 19% to $144 million, up from $121.4 million last year.

Third quarter 2011 sales increased 9% to $2.046 billion with comparable store sales up 5% over the prior year. For the nine months ended October 29, 2011, earnings per share were $4.03 of from $3.26 for the same period in 2010. These results represent a 24% increase on top of outstanding earnings per share growth of 36% and 52% for the first nine months of 2010 and 2009, respectively.

Net earnings for the first nine months was 18% to $465.2 million, up from $393 million last year. Sales for the first nine months of 2011 increased 9% to $6.210 billion with comparable store sales up 5% which was on top of robust 6% growth for the first nine months of 2010.

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