Ross Stores Inc. (ROST), the second largest off-price retailer of apparel and home accessories, reported a growth of 4% in comparable store sales for the four weeks ended August 27, 2011.

The recent results were below the 5% gain in same-store sales in the prior-year month. However, August same-store sales came in better than the company’s forecast of a 2% to 3% increase for the month.

For the month under review, sales increased 8% to $659 million from $608 million in the year-ago period. Regionally, Florida was the top performing market with categories like Dresses and Shoes positively influencing results.

For the seven months ended August 27, 2011, comparable store sales increased 4% compared with a 7% increase in the prior-year period. Total sales for the period rose 8% to $4,823 million from $4,455 million.

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

Ross’ nearest competitor, The TJX Companies Inc. (TJX), reported an increase of 1% in same-store sales for the month.

Guidance

The company expects comparable store sales to be in the range of 1% to 2% for the months of September and October.

We  believe  that  Ross’  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’ shares maintain a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Our long-term recommendation on the stock remains ‘Neutral’.
 
Zacks Investment Research