Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Ross Stores: When Not Bad Is Good

Sometimes, not doing bad is good.

With the fear of a tapped-out consumer having little to spend this holiday season, many investors have been braced for poor results from the retail sector. It turns out that just making good on a company's sales targets have been well received.

One company that didn't do bad was Ross Stores (NYSE: ROST  ) . The off-price retailer's sales report was in line with expectations. The company managed a 2% gain in comparable same-store sales for December on top off a 6% gain the prior December. Total sales were up 8% from $672 million to $729 million. Management felt confident enough with its sales momentum that it raised the low end of the fourth-quarter guidance from a range of $0.59-$0.65 to $0.63-$0.65.

It turns out that regional exposure had a material influence with the company's performance. The company lagged close competitor TJX (NYSE: TJX  ) , which reported an increase of 6% in comparable same-store sales. TJX -- which operates Marshall's, TJ Maxx, and Bob's Discount Stores -- contributed its strong results to its strength in the Northeast, where Ross has little exposure.

However, Ross fared better than its smaller competitor Stein Mart (NYSE: SMRT  ) , which reported flat comparable same-store sales. Stein Mart's stock, while recovering today, took a good wallop from the company's disappointing sales report yesterday. Stein Mart also noted strength in its northern tier of stores as well as out west, where Ross does have significant exposure.

One last note from the report is the company's management of inventory. Ross noted that inventories only grew 2% as improvements in the supply chain offset growth in its new store build out. While Ross' margin slippage is not good, management is offsetting the declines with increased inventory turns, which help lower its cash conversion cycle and increase its returns on invested capital.

And as the company continues on to new highs, not doing bad can be rather good.

For related Foolishness:

Foolanthropy is celebrating its 10th year -- and there are only three days left! To learn more about our five Foolish charities or to make a donation, visit

Fool contributor Matthew Crews welcomes your feedback -- really! He has no financial position in any of the companies mentioned. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 519517, ~/Articles/ArticleHandler.aspx, 10/22/2016 7:52:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
TJX $73.49 Up +0.20 +0.27%
The TJX Companies CAPS Rating: ****