This Retailer’s on Sale: Ross Stores, Inc. (ROST), The TJX Companies, Inc. (TJX), Stein Mart, Inc. (SMRT)

Operating income/ROE

Two of my favorite metrics for determining management efficiency, and Ross Stores and The TJX Companies, Inc. (NYSE:TJX) have excelled here, too. A drop in both cost of goods sold and SG&A expenses as a percentage of sales helped TJX power its recent operating income growth, and it appears Ross Stores, Inc. (NASDAQ:ROST) is on a similar track. Kohl’s saw its operating income dip due largely to a 5.7% year-over-year rise in cost of goods sold, and Stein Mart, Inc. (NASDAQ:SMRT) just isn’t growing sales enough to drive operating income growth.

Foolish takeaway

Looking to the future, Ross Stores, Inc. (NASDAQ:ROST) continues to improve its inventory logistics and has ample room to open new stores (only 4% of its overall store count lies in the northeast US). The TJX Companies, Inc. (NYSE:TJX) is expanding overseas with great success and is preparing to take baby steps into e-commerce. I like both companies quite a bit and believe their respective management teams know how to optimize an already solid business model.

The article This Retailer’s on Sale originally appeared on Fool.com and is written by Chad Heiges.

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