‎By: Zacks Equity Research

Ross Stores Inc. (ROST), the second largest off-price retailer of apparel and home accessories, reported last week a growth of 5% in comparable-store sales for the four-week period ended November 26, 2011. This was better than the company's forecast of a 2% to 3% increase for the month.

Sales in November increased 10% to $765 million from $696 million in the year-ago period. Regionally, Florida, California and Southwest were the top performing market with categories like Juniors and Shoes positively influencing results.

Ross also reported comparable sales for other periods. For the third quarter ended October 29, 2011, same-store sales grew 5% from the prior-year quarter. And sales surged 9% to $2,046 million compared with sales of $1,874 million in the year-ago quarter.

For the ten months November 26, 2011, comparable-store salesalso  spiked 5% compared with a rise of 6% in the prior-year period. Total sales for the period rose 9% to $6,976 million from $6,417 million a year ago.

Execution during the month and the ten-month period was driven by the company's aptitude in providing attractive brand name bargains to customers who value both quality and price.

Ross's nearest competitor, The TJX Companies Inc. (TJX), reported an increase of 4% in same-store sales for the month.

Guidance

Driven by the ahead-of-plan sales and merchandise gross margin results in third-quarter 2011, the company expects earnings per share to be in the range of $1.53 to $1.59 for the fourth quarter of fiscal 2011 with same-store sales increasing 2% to 3%. The current Zacks Consensus Estimate for the quarter is $1.59 per share coinciding with the upper end of the guidance range.

The company expects to achieve a growth rate of 3% to 4% in December 2011 comparable sales and 1% to 2% in January 2012 comparable sales.

For fiscal 2011, the company anticipates earnings in the range of $5.54 to $5.61 per share, an increase of 20.0% to 21.0% over fiscal 2010. The current Zacks Consensus Estimate for the fiscal year stood at $5.61 per share.

We believe that Ross's continuous effort to increase its store base, coupled with the ability to deliver positive comparable same-store sales, will augur well for its top-line growth.

Ross's shares maintain a Zacks #1 Rank, which translates to a short-term Strong Buy rating. Our long-term recommendation on the stock remains Outperform.

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