ROST Ross Stores Inc

By Denny Jacob

Ross Stores Inc. shares tumbled 17% to $76.86 in after-hours trading Thursday after the company reported a decline in sales in the first quarter and guided for same-store stores to decline in the second quarter.

The off-price retail apparel and home accessories store operator logged $338.4 million in net earnings, or 97 cents a share, for the quarter ended April 30, compared to net earnings of $476.5 million, or $1.34 a share, in the year-ago period. Analysts polled by FactSet expected earnings of 99 cents a share.

Sales declined to $4.33 billion from $4.52 billion. Analysts polled by FactSet expected $4.53 billion.

Ross Stores said comparable-store sales decline 7% on top of 13% gain in the first quarter of 2021 compared to 2019.

Chief Executive Barbara Rentler said in prepared remarks that the company is adopting a more conservative outlook for the rest of the year due to the first -quarter's results and the uncertain macroeconomic and geopolitical environment. The company is now forecasting same-store sales for the 13 weeks ending July 30 to decrease 4% to 6% on top of a 15% gain in the prior year period. Earnings per shape are expected to be between 99 cents and $1.07 compared to $1.39 in the second quarter last year.

Ms. Rentler said that sales underperformed over the balance of the quarter after a stronger start early on. She also said that the first-quarter operating margin declined to 10.8% from 14.2% a year earlier due to the deleveraging effect from the same store-sales decline combined with headwinds from higher freight and wage costs.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

May 19, 2022 16:39 ET (20:39 GMT)

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