Ross Stores 1Q15 Earnings Call Notes

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EPS up 16%, Sales up 10%, comps up 5%

“Adjusting for this expense timing, first quarter 2015 earnings per share rose 16% over the prior year period. Sales rose 10% for the quarter to $2.938 billion with the comparable store sales up 5% over the prior year.”

Reasons to be conservative going forward

“We have been very pleased with our performance over the last few quarters, but there are few reasons to be a little bit conservative as we look forward. Firstly, we think the macroeconomic and retail outlook remains pretty uncertain. You see that and you get a sense of that in the recent results that have been announced by other retailers.’

“Actually that feeds into a second concern which is those results themselves may cause the environment to become more promotional over the next few months. And then the third reason for conservatism is that we’re up against our own tough multi-year comparisons. ”

Making adjustments to wages

“what are we planning to do on wages, we’ve mentioned on the call in February that we expected to see more wage rate pressure this year and that we would be making adjustments to keep wage rates competitive. One of the adjustments we will be making in the second quarter is to raise our minimum entry level hourly rate to $9 and that adjustment together with any offsets is built into the earnings guidance.’

Lots of available inventory

“part of what drives that number is really the great deals that we’ve gotten in the marketplace. Between the port dislocation and mixed sales results in Q1, there was a lot of availability. So, we feel very good about the packaway that we have, it’s branded products at really great values that our customers expect”

Bring it on competition

“if people want to grow the off-price category. If they want to grow the share of the off-price segment probably at the expense of other retail formats, that would be fine. But we actually have – we think we have quite a strong skill set and set of capabilities that put us in a pretty strong position and we’ve always operated in a very competitive environment.”

We expect wage rates are moving up

“As we’ve said before, though, we expect wage rates are going to move up over the next few years. I think you’re seeing that in the press almost every day. So it’s certainly something that we expect that we’re going to be talking more about as we get into our budget for 2016 and our longer term plans and certainly when we talk about our earnings guidance next February, my guess it will be part of that discussion too.”