Ross Stores, Inc.(NASDAQ: ROST) stock fell over 3.2% in the pre market session of March 6th, 2019 (Source: Google finance) as they issued weak first-quarter guidance. Average in-store inventories were down slightly versus last year. For the full year operating margin declined 85 basis points to 13.6%, due in part to last year’s 20 basis point benefit from the 53rd week. Cost of goods sold for the year increased 55 basis points, consisting of 40 basis points of higher freight costs, a 15 basis point increase in distribution expenses and a 10 and 5 basis point rise in buying and occupancy cost respectively. For the first quarter of FY 19, ROST expects the comparable store sales to be flat to up 2%.
For the fourth quarter, Men’s was the best performing area and Ladies segment underperformed. Geographically the Southeast and Midwest were the strongest regions. dd’s DISCOUNTS customers continued to respond positively to its merchandise assortment, leading to another quarter and year of solid gains in both sales and operating profits. As we ended 2018, total consolidated inventories were up 7% over the prior year with Packaway levels at 46% of the total compared to 49% last year.
ROST in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.20, while e adjusted revenue was $4.11 billion in the fourth quarter of FY 18. Comparable-store sales rose 4%.
Earnings per share are projected to be $1.05 to $1.11, versus $1.11 for the first quarter ended May 5, 2018.
ROST forecast same-store sales growth around 1% to 2% for fiscal 2019, and fiscal 2019 earnings per share between $4.30 and $4.50. ROST also plan to open about 100 new stores this year, consisting of approximately 75 Ross Dress for Less and 25 dd’s DISCOUNTS locations.
Additionally, Ross said its board has authorized a two-year, $2.55 billion share buyback program and a 13% increase in its quarterly dividend to 25.5 cents a share, payable March 29 to shareholders of record March 18. A total of 12.5 million shares of common stock were repurchased during fiscal 2018, for an aggregate purchase price of $1.075 billion. During the fourth quarter, 3.1 million shares were repurchased by the company for a total price of $268 million.