Ross Stores Inc. ( ROST - Snapshot Report ) , one of the largest off-price apparel and home fashion chain retailers in the U.S., came up with stronger-than-expected sales and same-store sales numbers for the four weeks ended July 28, 2012.

Driven by strong consumer demand for the company’s wide array of brands, Ross Stores’ comparable store sales for July increased 7%, flat with the prior-year period. Consequently, the company’s total sales for the four-week period surged 12% to $709 million compared with $635 million in the year-ago period.

Further, Ross Stores reported second quarter 2012 comparable store sales gain of 8% versus a 4% increase registered in the year-ago quarter. Net sales for the quarter rose 12% to $2,341 million from $2,089 million in the year-ago quarter.

Robust sales in the quarter mainly mirror the company’s relentless focus on offering exciting collection in its name-brand fashion for the family and home, which appeals to its value-oriented customers.

On the back of better-than-expected sales results as well as robust gross margins in July, management raised its second quarter earnings per share forecast to range between 80 cents and 81 cents, from the prior guidance of 77 cents to 78 cents. The current Zacks Consensus Estimate for second quarter 2012 stands at 81 cents per share.

Ross Stores is scheduled to release its fiscal second quarter 2012 financial results on August 16, 2012.

Peer Performance

One of Ross Store’s competitors, Gap Inc. ( GPS - Analyst Report ) , registered a 10% rise in its July 2012 comparable store sales. Meanwhile, another competitor, Nordstrom Inc. ( JWN - Analyst Report ) , reported positive same-store sales of 0.9% for the month of July 2012.

Our Recommendation

Ross Stores and its subsidiaries operate two chains of off-price retail apparel and home accessories stores in the U.S. These stores offer branded apparel, shoes, and accessories for the entire family, as well as gift items, linens, and other home-related merchandise.

The company also offers small furniture and furniture accents, educational toys and games, luggage, gourmet food and cookware, watches, sporting goods and fine jewelry, which provide it with a competitive edge over its rivals.

Ross Stores has implemented a micro-merchandising tool, through which the company expects to enhance its total sales and profitability by targeting expansion in its existing markets. Moreover, Ross remains focused on new store growth, share buybacks and attractive dividend payouts even as many other retailers are implementing dramatic cutbacks, and has the financial strength to continue its course and build shareholders' value.

Ross' shares maintain a Zacks #2 Rank, which translates into a short-term Buy rating. We have a long-term Neutral recommendation on the stock.