This excerpt taken from the ROST 8-K filed Nov 15, 2005.
ROSS STORES REPORTS THIRD QUARTER EARNINGS,
Pleasanton, California, November 15, 2005 -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 13 weeks ended October 29, 2005 of $.25, compared to $.25, as restated, for the 13 weeks ended October 30, 2004. Net earnings for the third quarter ended October 29, 2005 were $36.3 million, compared to $37.7 million, as restated, for the 13 weeks ended October 30, 2004. Fiscal 2005 third quarter sales rose 20% to $1.237 billion, from $1.028 billion for the quarter ended October 30, 2004. Comparable store sales for the period increased 9% over the prior year.
For the nine months ended October 29, 2005, earnings per share totaled $.87, compared to $.78, as restated, for the nine months ended October 30, 2004. Net earnings for the nine months ended October 29, 2005 were $128.7 million, compared to $118.1 million, as restated, for the same period in the prior year. Sales for the first nine months rose 17% to $3.533 billion, with same store sales up 6% over the prior year period.
Earnings for the third quarter of 2004 are inclusive of a $.01 per share gain on the sale of the Companys former corporate office and distribution center in Newark, California. Results for the nine month period ended October 30, 2004 include that gain, as well as a non-cash charge of $.07 in the second quarter to write-down the value of the Newark property to its estimated fair market value. Net of the gain on the sale of the property, the impairment charge reflected in the 2004 nine month results is $.06 per share.
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, Sales during the third quarter were stronger than expected, benefiting from broadbased geographic strength and solid same store sales gains in our back-to-school businesses. As expected, gross margin during the period declined about 60 basis points, mainly due to the previously-announced increase in inventory shortage resulting from our recent physical inventory of stores and a net cumulative expense for corrections of differences identified in the related reconciliation of merchandise accounts payable. These higher expenses were partially offset by leverage on occupancy and buying costs, lower distribution expenses and a slight increase in merchandise gross margin.
General, selling and administrative expenses as a percent of sales rose about 45 basis points during the third quarter, as leverage from the 9% increase in same store sales was more than offset by higher incentive plan costs compared to the prior year. During 2004, the incentive plan expense accruals from the first half of that year were reversed in the third quarter when we determined that no bonuses would be paid under the plan, said Mr. Balmuth.
Looking ahead to the fourth quarter, Mr. Balmuth said, We are encouraged by our recent sales trends and remain cautiously optimistic about our prospects heading into the important holiday season. For the 13 weeks ending January 28, 2006, we continue to project same store sales gains of 2% to 3% and are now forecasting earnings per share to be in the range of $.44 to $.47, compared to $.35, as restated, in the prior year period.