Ross same-store sales fall, raises 1st-quarter outlook

CHICAGO (Reuters) - Ross Stores Inc (ROST.O: Quote, Profile, Research, Stock Buzz) said on Thursday that sales at stores open at least a year fell 2 percent in March, a better performance than analysts had expected, and the company boosted its first-quarter profit forecast, sending its shares up as much as 6.9 percent.

"March same-store sales were ahead of our expectation for a 4 percent to 5 percent decline, with the month benefiting from broad-based merchandise and geographic trends," Ross Chief Executive Michael Balmuth said in a statement.

Analysts, on average, had been expecting the off-price retailer to post a decline of 4.1 percent, according to Reuters Estimates.

Total sales rose 6 percent to $633 million in the five weeks ended April 5, said the company, which buys excess merchandise in bulk from manufacturers at below-wholesale prices.

The Pleasanton, California-based company said it now expects first-quarter earnings of 56 cents to 58 cents a share, up from a prior forecast of 52 cents to 54 cents. Analysts' average forecast is 54 cents.

Balmuth said the company still expects April same-store sales to rise 7 percent to 8 percent.

The dresses category saw same-store sales rise in the low 20 percent range in March, while the shoes and home categories both saw mid-single-digit increases, Ross Chief Financial Officer John Call said in a recorded phone message.

Texas and the Mid-Atlantic were the strongest markets with same-store sales gains in the low-single digits, while California same-store sales fell 2 percent, a better performance than the company had expected, Call said.

At the end of the month, average in-store inventories were down about 11 percent compared with a year earlier, while total consolidated inventories were estimated to be down 6 percent, he said.