Ross Stores, Inc. (NASDAQ: ROST) stock rose over 0.3% on 21st May, 2021 (as of 12:02:09 UTC-4 · USD ; Source: Google finance) as the company posted better than expected results for the first quarter of FY 21. The comparable store sales grew 13% in the quarter, driven by a larger average basket. While traffic was down slightly compared to 2019, it accelerated significantly compared to the fourth quarter. Operating margin had expanded slightly to 14.2% compared to 14.1% for the same period in 2019. Cost of goods sold levered 35 basis points in the first quarter. Merchandise margin had expanded 85 basis points and occupancy levered by 60. These improvements were partially offset by higher freight costs of 75 basis points, mainly due to the ongoing industrywide supply chain congestion. SG&A for the quarter delevered by 25 basis points, mainly due to the operating expenses associated with the pandemic and higher incentive costs, given our better-than-expected first quarter results. Total net COVID-related expenses for the period were about 35 basis points, the vast majority of which impacted SG&A. ROST in the first quarter of FY 21 has reported the adjusted earnings per share of $1.34, beating the analysts’ estimates for the adjusted earnings per share of 90 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $4.52 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue by 15.24%. Additionally, the company authorized a new program to repurchase up to $1.5 billion of its common stock through fiscal 2022, with plans to buy back $650 million this year and $850 million in 2022. The same store sales are expected to be up 5% to 7% for the 13 weeks ending July 31, 2021 versus the same period in 2019. Second quarter 2021 earnings per share are expected to be in the range of $0.80 to $0.89, versus $1.14 in fiscal 2019. For the 52 weeks ending January 29, 2022, the company expects annual comparable store sales gains to be in the range of 7% to 9% versus 2019 and earnings per share expected to be in the range of $3.93 to $4.20.The company expects to open 30 stores during the second quarter consisting of 22 Ross and eight dd’s DISCOUNTS.

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