Ross Stores Inc. (NASDAQ:ROST) Q3 2019 Earnings Conference Call - Final Transcript

Nov 21, 2019 • 04:15 pm ET

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Ross Stores Inc. (NASDAQ:ROST) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] And our first question is from Matthew Boss with JP Morgan. Your line is open.

Analyst
Matthew Boss

Great, thanks and congrats on a really nice quarter. Barbara maybe on the topline, any areas of sequential improvement that you'd like to highlight by category, maybe how best to think about ladies apparel relative to the total comp going forward in any particular areas of assortment opportunity that you think is worth noting into this year's holiday?

Executive
Barbara Rentler

Well, as we said in the comments, basically all merchandise areas, it was very broad based performance, so overall the company took a lift. As you know, as we look at ladies, we really saw improved sales in the quarter and it performed slightly above our expectations. You know, and we are expecting to see ongoing progress in the quarter, so we are pleased with the pace of their improvements, but at this point we wouldn't provide more detail in terms of that.

Analyst
Matthew Boss

Great, and then just a [Speech Overlap] sorry go ahead.

Executive
Barbara Rentler

Second question again.

Analyst
Matthew Boss

Just more into the holiday, any particular areas of assortment opportunity that you're excited about?

Executive
Barbara Rentler

Sure. Our main focus will be to build upon the success of our gift giving assortment, I mean, we've built our gifts throughout the entire store, and we feel good about that and we feel that we're offering gift items that really compelling values, because we really feel that value remains the most critical factor for her, where she makes her shopping decisions and we believe that we are really positioned to deliver on this.

Analyst
Matthew Boss

Great. And then just a follow-up more on the margin side. So it sounds like freight is -- has now moderated and it's not the headwind for pretty much everybody out there. So I guess my question is, if same-store sales are consistently in the 3% to 4% range and as we're thinking now going forward. Is there any reason to think that the algorithm has any different historically than it was on the bottom line? If -- again, if you're at that 3% to 4% comp range, just any margin headwinds or things to highlight that would be different than that historical 3% to 4% same-store sales double-digit earnings growth algorithm going forward?

Executive
Michael J. Hartshorn

Matt, it's Michael Hartshorn. So our long-term earnings algorithm has not changed, you know, a combination of new store growth, comp growth, EBIT margin expansion at the high-end and then the buyback program. The one thing that I would throw in the midst with a lot of uncertainty around it is tariff. So, net of tariffs we haven't changed our long-term algorithm.

Analyst
Matthew Boss

That's great. Best of luck.

Operator
Operator

Your next question comes from Mark Altschwager with Baird. Your line is open.

Analyst
Mark Altschwager

Great. Good afternoon thanks for taking the question. I was hoping if you could give a bit more color just on the distribution expenses in the quarter, I know that was a bit of a headwind. Do you expect that to normalize in Q4? And then