PLEASANTON, Calif. (AP) -- Discount store operator Ross Stores Inc. said Thursday that its second-quarter net income jumped 23 percent, boosted by a double-digit sales increase and profitability improvements.
The results were in line with Wall Street predictions, but the company issued profit predictions for the current quarter and full year that were below average analysts' predictions.
For the quarter ended July 28, the Pleasanton, Calif.-based company earned $182 million, or 81 cents per share, up from $148.3 million, or 64 cents per share, in the same quarter last year. Revenue rose 12 percent to $2.34 billion from $2.09 billion.
Analysts, on average, expected a profit of 81 cents per share on $2.34 billion in revenue, according to a FactSet poll.
The company said its revenue at stores open at least a year rose 7 percent. The metric is a key measure of a retailer's health, because it excludes revenue at stores that opened or closed during the year.
Ross credited the profit jump to strong demand for its brand-name merchandise from shoppers looking for a bargain, along with tight controls over the company's inventories and expenses.
The company said it expects to post a third-quarter net income of 63 cents to 66 cents per share and a fourth-quarter net income of 99 cents to $1.04 per share. Analysts expect a third-quarter profit of 70 cents and a fourth-quarter profit of $1.02 per share.
For the full year, Ross projected net income of $3.36 to $3.44 per share, while analysts expect $3.45 per share.
Ross late Wednesday announced the approval of a succession plan that calls for Michael Balmuth, its current vice chairman and CEO, to remain in those roles through June 1, 2014, when he will move to the job of executive chairman.
Balmuth, 62, has spent the past 23 years at the company and the last 16 of those as CEO.
Norman Ferber, the current chairman, will become chairman emeritus June 2014 and his current consulting responsibilities will remain unchanged, the company said.
Ross added that it plans to elect its new CEO from its current lineup of senior executives.
Ross shares fell 46 cents to $68.04 in morning trading.