Ross Stores 3Q profit up, announces stock split

PLEASANTON, Calif. (AP) -- Ross Stores Inc., which sells clothing, accessories and other items at discounted prices, said Thursday that its third-quarter profit climbed 19 percent as shoppers continue to seek out bargains.

While the results topped Wall Street estimates, the company reaffirmed its earlier earnings and sales outlook for the fourth quarter.

"The ongoing uncertainty in the macro-economic environment as well as the possibility of an even more competitive than usual holiday season, keep us somewhat cautious in our outlook for the balance of the year," CEO Michael Balmuth said in a statement.

Its shares fell $2.16, or 2.5 percent, to $85.73 in afternoon trading.

The Pleasanton, Calif., company reported net income of $144 million, or $1.26 per share, for the three months ended Oct. 29. That compares with $121.4 million, or $1.02 per share, a year earlier.

Revenue increased 10 percent to $2.05 billion from $1.87 billion.

Analysts expected earnings of $1.24 per share on $2.04 billion in revenue, according to a FactSet survey.

"Our strong revenue gains continue to be driven mainly by our ability to deliver compelling bargains on a wide assortment of exciting name brand fashions for the family and the home to today's increasingly value-focused consumers," Vice Chairman and CEO Michael Balmuth said in a statement.

Consumers have continued to look to get the most from their dollar given ongoing economic uncertainty and high unemployment.

Revenue at stores open at least a year climbed 5 percent. This metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

The company also announced a stock split. It said its board approved a 2-for-1 stock split that will be paid as a dividend on Dec. 15 to shareholders of record on Nov. 29. The company also declared a regular quarterly dividend of 22 cents per share, or 11 cents per share after the stock split. That dividend will be paid on Dec. 30 to shareholders of record on Nov. 29.

For the fourth quarter, Ross Stores still expects earnings between $1.53 to $1.59 per share, before the effect of the stock split. Revenue at stores open at least a year is expected to rise 2 percent to 3 percent.

Analysts foresee earnings of $1.59 per share for the quarter.

Ross Stores has 1,038 stores in 29 states, the District of Columbia and Guam.