Piper Jaffray Comments On Ross Stores December Sales

Ross Stores ROST announced December same store sales increased 4%, beating Piper Jaffray's above-consensus estimate of flat to +2%. Total inventory growth accelerated from +6% in November to +19% in December as the company invested in close-out merchandise. Junior's was the best performing category during December with a mid-teens gain. Dresses continue to perform well with the category posting a low double-digit increase. Florida was once again the best performing region with a +LDD comp. California increased 2% following an 8% increase in December 2009. Average in-store inventories declined 13%, while total inventory increased 19%. This represents a significant acceleration from +6% in November and +3% in October. The company was able to purchase a large amount of close-out merchandise, which Piper believes is the result of apparel imports tracking ahead of apparel sales. Management raised Q4 guidance to $1.32-1.34 from the high end of $1.15-1.20 range. January same store sales were guided to decline 1-2%, but January represents only 21% of Q4 sales suggesting the majority of earnings have already been booked. ROST is trading higher at $63.99