What Drove Ross Stores’ Higher Sales in Fiscal 3Q15?
Ross Stores Impressed Investors with Upbeat Fiscal 3Q15 Results
Sales in 3Q15
Off-price retailer Ross Stores (ROST) impressed its investors with sales of $2.78 billion in the third quarter of fiscal 2015 ended October 31, 2015. The company’s 3Q15 sales exceeded the consensus Wall Street analyst sales estimate of $2.77 billion. Ross Stores reported its 3Q15 results on November 19.
Higher sales in 3Q15
Ross Stores’ sales in 3Q15 increased by 7.1% from the comparable quarter of the previous year. Barbara Rentler, chief executive officer of Ross Stores, attributed the company’s better-than-expected results to consumers’ continued positive response to the retailer’s diverse inventory and price points.
We will discuss the company’s 3Q15 earnings in Part 4 of this series. Ross Stores makes up 0.2% of the holdings of the iShares S&P 500 Growth ETF (IVW).
Ross Stores’ peer in the off-price retail space, TJX Companies (TJX), also beat sales expectations in the comparable quarter and posted a sales growth of 5.3% on a year-over-year basis. For more information on the third quarter performance of TJX Companies, please read TJX Companies’ Strong Performance in Fiscal 3Q16.
Off-price retailer Burlington Stores (BURL) is scheduled to announce its 3Q15 results on November 24. Nordstrom (JWN), which owns the off-price Rack stores, reported 3Q15 sales of $3.3 billion, missing the consensus analyst estimate of $3.4 billion. Macy’s (M) reported a 5.2% decline in its 3Q15 sales. Macy’s marked its entry into the off-price space with three pilot stores in the New York metro area.
Sales growth drivers
Ross Stores reported same-store sales of 3% in 3Q15. Michael Hartshorn, Ross Stores’ chief financial officer, attributed this increase to higher traffic and a rise in the size of the average basket. The company’s CFO also stated that the men’s merchandise category delivered the strongest performance in the third quarter and that the Midwest was the top-performing region.
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