Three Ross Stores insiders including the top executive sold 193,079 shares of the discount retailer for $13,910,294, an average of $72.04 each, on March 3 and 4.
Chief Executive and Vice Chairman Michael Balmuth sold 150,673 Ross (ticker: ROST) shares for $10,854,181. He now directly holds 144,257 shares, a stake of less than 1%.
Regulatory filings show that Balmuth’s sale followed the vesting of share rights that were settled on March 3. His most recent previous transaction was on March 18, 2013, when he sold 177,900 shares for $10 million, an average of $55.93 each through a 10b5-1 plan.
Michael J. Hartshorn, who was named chief financial officer effective Feb. 2, sold 2,406 shares for $175,012 and now directly holds 35,268 shares. This is his first transaction at the company.
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John G. Call, a senior vice president who was succeeded by Hartshorn as CFO, exercised options and sold 40,000 shares for $2,881,100 and now holds 88,562 shares. His most recent previous transaction was on April 15 when he exercised options and sold 40,000 shares for $2.5 million, an average of $63.45 each. Call’s sale was a 10b5-1 exercise and sale.
Balmuth has served as CEO since 1996. Hartshorn was a senior vice president and deputy CFO before his promotion.
A spokeswoman for Ross Stores was not immediately available to comment on the sales.
Shares have come down since a Nov. 18 intraday high of $81.58, a record-high stock price when adjusted for dividends and stock splits. Ross closed at $72.36 on Monday.
On Feb. 27, Ross reported a better-than-expected fourth quarter and raised its regular quarterly dividend. “As we enter 2014, in addition to our own challenging multi-year sales and earnings comparisons,” Balmuth was quoted in the report, “we also continue to face ongoing uncertainty in the macro-economic and retail climates.” Not exactly comforting words for investors, yet Ross may be in a better position than peers.
“It’s the best name I cover in the apparel space,” says Morningstar analyst Bridget Weishaar, who rates Ross four stars out of five. In an interview with Barrons.com, Weishaar adds, “Their net same-store sales guided slightly lower, down 1%-2%, but they’re still outperforming their peers and gaining market share.”
The discounter scratches the itch for shoppers. “The consumer wants to feel that they have a bargain,” says Weishaar. “You see people from all walks of life, all ages and all incomes shopping at these stores.”
Brian Angerame, a managing director and portfolio manager at ClearBridge Investments, says, “Over the past five years, even going back 14 years to when the tech bubble burst, the business model is very effective with off-price branded merchandise.” ClearBridge owns a position in Ross.
“Over the past four-or-five month period, most retailers got carried out on a stretcher,” says Angerame. “In the end, Ross will prove that they came out with positive comps in the low-single digits.”
Date: MARCH 10, 2014