http://www.morningstar.com/earnings/45279149-ross-stores-inc-rost-q3-2012.aspx

Ross Stores Inc ROST
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/15/2012

Operator: Good morning, and welcome to the Ross Stores Third Quarter 2012 Earnings Release Conference Call. The call will begin with prepared comments 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 2011 Form 10-K and fiscal 2012 Form 10-Qs and 8-Ks are 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. Joining me on our call today 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, Group Senior Vice President and Chief Financial Officer; and Michael Hartshorn, Senior Vice President and Deputy Chief Financial Officer.

We'll begin with a review of our third quarter performance followed by our outlook for the upcoming holiday season, after which we will be happy to respond to any questions you may have.

We are pleased with the strong sales and earnings gains we generated in the third quarter and first nine months of 2012. Our better-than-expected results year-to-date were driven by our ongoing ability to offer shoppers a fresh and exciting array of compelling name brand bargains for the family and the home. In addition, operating our stores on lower inventories while strictly controlling expenses continues to enhance profit margins. Earnings per share for the 13 weeks ended October 27, 2012 increased 14% to $0.72 up from $0.63. These results are on top of a 24% gain in last year's third quarter. Net earnings for the quarter grew 11% to $159.5 million. Sales rose 11% to $2.263 billion, with comparable store sales up 6% following 5% growth in the third quarter of 2011.

For the nine months ended October 27, 2012 earnings per share were $2.46 up from $2.01. These results represent a 22% increase versus a 24% gain last year. Net earnings for the period rose 18% to $550.2 million, up from $465.2 million for the first nine months of 2011. Sales for the first nine months of 2012 increased 12% to $6.960 billion with comparable store sales up 7% on top of a 5% gain for the same period last year.

Merchandise and geographic trends were broad-based for the third quarter. Juniors' was the best-performing category while the Southwest Texas and Florida showed the most geographic trend. Earnings before interest and taxes in the 2012 third quarter grew to a record 11.3% of sale up from 10.9% last year.

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