Ross Earnings Rise

Comparable store sales for the same period grew 3% on top of a 3% gain in the same quarter of 2004, and Ross CEO Michael Balmuth indicated during Wednesday's conference call that same store sales for the rest of this year should be free from some of the problems that plagued the company last year. Said Balmuth, "Last year, the problems associated with the implementation of our new merchandise information system contributed to same store sales that declined 3% in the second and third quarters." The merchandise information system problems also produced flat comparable store sales in the fourth quarter last year, Balmuth said, but the company believes those problems are behind it.

In addition to the improvement of the merchandise information system, Balmuth discussed a number of operational improvements that Ross is working on, including streamlining of its distribution centers. "We began implementation of new standards in our distribution centers in the first quarter," he said. The new standards, expected to be fully implemented by 2006, are improving operations at the centers by "using industrial engineers to assess each function of the distribution centers to create new standards, which will ultimately increase productivity," Balmuth said.

Ross last year launched its new dd's Discounts chain and, although Balmuth commented that it is early in the development of the chain, thus far the dd's stores "are performing slightly better than our expectations." The 10 California locations of dd's that Ross opened last year during the third quarter average 26,000 gross sf, with similar departments to Ross but with a selection of brands that is similar to those of moderately priced department stores. Including the new chain, Ross operates about 663 Ross stores and the 10 dd's Discounts, an increase of about 74 stores from the number at this time last year.