Ross Stores 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Sales up 7%

“Sales increased 7% to just over $8 billion, with comparable store sales up 2% over the same period in 2013.’

Still prudent to maintain a cautious outlook

“Our merchants have done a terrific job of acquiring a wide array of exciting and sharply priced name-brand fashions and gifts to appeal to today’s value-driven shoppers. That said we believe it is prudent to maintain a cautious outlook as we have all year, given continued uncertainty in the overall environment and the likelihood of an intensely competitive and promotional holiday season.”

Promotional environment will be much more aggressive

“We are anticipating that the promotional environment will be much more aggressive, and we look at two things. We look at the pace, the amount of times that our competitors promote, and we also look at the depths that they promote. Since we’re in the value business, off of mainstream retailers, we’re constantly monitoring that.”

We’re not economists, we don’t know how much gas prices are going to help

“we’re not economists, so it’s for us to sort of calibrate those things and create them off against each other. So we really don’t know to what degree gas prices helped or to what degree they will help going forward.’

The port disruption will lead to extra inventory

“‘as it pertains to inventory from the port, it is hard to tell. It is – it’s a buyers’ market, there’s a lot of merchandise in the market right now. It’s hard to differentiate what’s from the port or not. But what I would say is that whenever there is a disruption like that in the marketplace, it definitely leads to supply. So you would expect that we would see supply sometime the end of this year into beginning of next year.”

We’re an everyday low price model

“We don’t promote. So we’re in an everyday value business, so we have to anticipate where we think they are going to be, and then set our values based off of where we think they’re going to bench their promotions.”

No major issues in real estate availability

“we don’t see any major issues in terms of real estate availability at this point.”

More digital

“We have over the last several years devoted more and more of our marketing budget to digital. We see digital as a good sort of proxy for word of mouth, which is kind of something we’ve always relied on very heavily, that the customer will spread sort of the – will talk about the great deals they got at Ross with their friends and we see digital as a way of doing that.”