ROST Ross Stores Inc

Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 13 weeks ended November 2, 2024 of $1.48, up from $1.33 per share for the 13 weeks ended October 28, 2023. Net income for the period rose to $489 million versus $447 million last year. Sales for the 2024 third quarter were $5.1 billion, up from $4.9 billion in the prior year, with a comparable store sales gain of 1%.

For the nine months ended November 2, 2024, earnings per share were $4.53 on net earnings of $1.5 billion, versus $3.74 per share on net income of $1.3 billion for the same year-to-date period in 2023. Sales for the first nine months of 2024 were $15.2 billion, with comparable store sales up 3% over the prior year.

Barbara Rentler, Chief Executive Officer, commented, “We are disappointed with our third quarter sales results as business slowed from the solid gains we reported in the first half of 2024. Although our low-to-moderate income customers continue to face persistently high costs on necessities pressuring their discretionary spending, we believe we should have better executed some of our merchandising initiatives. In addition, a combination of severe weather during the quarter from Hurricanes Helene and Milton, along with unseasonably warm temperatures, also negatively impacted our results.”

Ms. Rentler continued, “Despite the below-plan sales results, earnings were ahead of our expectations. Operating margin for the quarter was 11.9%, up from 11.2% last year, as lower incentive, freight, and distribution costs more than offset the planned decline in merchandise margin.”

Ms. Rentler added, “During the third quarter, we repurchased 1.8 million shares of common stock for an aggregate price of $262 million. We remain on track to buy back a total of $1.05 billion in common stock during fiscal 2024 under the Company’s two-year $2.1 billion repurchase program.”

Fourth Quarter and Fiscal 2024 Guidance

Looking ahead, Ms. Rentler said, “For the 13 weeks ending February 1, 2025, we continue to project comparable store sales to increase 2% to 3%. Earnings per share for the fourth quarter are planned to be in the range of $1.57 to $1.64, compared to $1.82 for the 14 weeks ended February 3, 2024. This guidance range includes an unfavorable impact of approximately $0.03 per share primarily from the timing of packaway-related expenses that benefited the third quarter. Based on our year-to-date results and fourth quarter forecast, earnings per share for the 52 weeks ending February 1, 2025 are now expected to be in the range of $6.10 to $6.17 versus $5.56 last year. As a reminder, both the 2023 fourth quarter and full year results included an approximate $0.20 earnings per share benefit from the 53rd week.”

Ms. Rentler concluded, “We remain confident that our ongoing focus and commitment to delivering the most compelling values possible will enable us to maximize our potential for profitable growth now and in the future.”

The Company will host a conference call on Thursday, November 21, 2024 at 4:15 p.m. Eastern time to provide additional details concerning its third quarter results and management’s outlook for the remainder of the year. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at www.rossstores.com. An audio playback will be available at 201-612-7415, PIN #13749868 until 8:00 p.m. Eastern time on November 29, 2024, as well as on the Company’s website.

Forward-Looking Statements: This press release and the related conference call remarks contain forward-looking statements regarding, without limitation, projected sales, costs, and earnings, planned new store growth, capital expenditures, and other matters. These forward-looking statements reflect our then-current beliefs, plans, and estimates with respect to future events and our projected financial performance and operations, and they are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “target,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “outlook,” “looking ahead,” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without limitation, uncertainties arising from the macroeconomic environment, including inflation and the price of necessities, high interest rates, housing costs, energy and fuel costs, financial and credit market conditions, recession concerns, geopolitical conditions, and public health and public safety issues that affect consumer confidence, consumer disposable income, and shopping behavior, as well as our costs; unexpected changes in the level of consumer spending on, or preferences for, apparel and home-related merchandise, which could adversely affect us; competitive pressures in the apparel and home-related merchandise retailing industry; our need to effectively manage our inventories, markdowns, and inventory shortage in order to achieve our planned gross margins; changes in U.S. tax, tariff, or trade policy regarding apparel and home-related merchandise produced in other countries, which could adversely affect our business; risks associated with importing and selling merchandise produced in other countries, including risks from supply chain disruption, shipping delays, and higher than expected ocean freight costs; unseasonable weather or extreme temperatures that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise; our dependence on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to anticipate consumer preferences and to purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices; information or data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could disrupt our operations, and result in theft or unauthorized disclosure of confidential and valuable business information, such as customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business; disruptions in our supply chain or in our information systems, including from ransomware or other cyber-attacks, that could impact our ability to process sales and to deliver product to our stores in a timely and cost-effective manner; our need to obtain acceptable new store sites with favorable consumer demographics to achieve our planned store openings; our need to expand in existing markets and enter new geographic markets in order to achieve planned growth and market penetration; consumer problems or legal issues involving the quality, safety, or authenticity of products we sell, which could harm our reputation, result in lost sales, and/or increase our costs; an adverse outcome in various legal, regulatory, or tax matters, or the adoption of new federal or state tax legislation that increases tax rates or adds new taxes, that could increase our costs; damage to our corporate reputation or brands that could adversely affect our sales and operating results; our need to continually attract, train, and retain associates with the retail talent necessary to execute our off-price retail strategies; our need to effectively advertise and market our business; possible volatility in our revenues and earnings; a public health or public safety crisis, or a natural or man-made disaster in California or another region where we have a concentration of stores, offices, or a distribution center, that could harm our business; and our need to maintain sufficient liquidity to support our continuing operations and our new store openings. Other risk factors are set forth in our SEC filings including the Form 10-K for fiscal 2023 and fiscal 2024 Form 8-Ks and 10-Qs on file with the SEC. The factors underlying our forecasts and plans are dynamic and subject to change. As a result, any forecasts or forward-looking statements speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise these forward-looking statements.

About Ross Stores, Inc.

Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2023 revenues of $20.4 billion. Currently, the Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,836 locations in 43 states, the District of Columbia, and Guam. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operates 356 dd’s DISCOUNTS® stores in 22 states that feature a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day. Additional information is available at www.rossstores.com.

  Ross Stores, Inc. Condensed Consolidated Statements of Earnings     Three Months Ended Nine Months Ended ($000, except stores and per share data, unaudited)

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

  Sales

$

5,071,354

 

$

4,924,849

 

$

15,216,940

 

$

14,354,440

 

  Costs and Expenses Cost of goods sold

 

3,634,283

 

 

3,564,268

 

 

10,916,884

 

 

10,426,241

 

Selling, general and administrative

 

832,855

 

 

810,470

 

 

2,445,494

 

 

2,364,590

 

Interest income, net

 

(42,527

)

 

(43,319

)

 

(131,827

)

 

(111,930

)

Total costs and expenses

 

4,424,611

 

 

4,331,419

 

 

13,230,551

 

 

12,678,901

 

  Earnings before taxes

 

646,743

 

 

593,430

 

 

1,986,389

 

 

1,675,539

 

Provision for taxes on earnings

 

157,935

 

 

146,103

 

 

482,443

 

 

410,702

 

Net earnings

$

488,808

 

$

447,327

 

$

1,503,946

 

$

1,264,837

 

  Earnings per share Basic

$

1.49

 

$

1.34

 

$

4.56

 

$

3.76

 

Diluted

$

1.48

 

$

1.33

 

$

4.53

 

$

3.74

 

    Weighted-average shares outstanding (000) Basic

 

327,710

 

 

334,282

 

 

329,453

 

 

336,187

 

Diluted

 

329,937

 

 

336,261

 

 

331,728

 

 

338,107

 

    Store count at end of period

 

2,192

 

 

2,112

 

 

2,192

 

 

2,112

 

    Ross Stores, Inc. Condensed Consolidated Balance Sheets     ($000, unaudited) November 2, 2024 October 28, 2023 Assets   Current Assets Cash and cash equivalents

$

4,349,262

$

4,499,497

Accounts receivable

 

176,218

 

171,915

Merchandise inventory

 

2,859,106

 

2,613,808

Prepaid expenses and other

 

241,703

 

206,725

Total current assets

 

7,626,289

 

7,491,945

  Property and equipment, net

 

3,657,679

 

3,397,519

Operating lease assets

 

3,349,427

 

3,160,017

Other long-term assets

 

271,791

 

221,139

Total assets

$

14,905,186

$

14,270,620

  Liabilities and Stockholders’ Equity   Current Liabilities Accounts payable

$

2,346,479

$

2,280,278

Accrued expenses and other

 

637,332

 

665,279

Current operating lease liabilities

 

699,200

 

680,088

Accrued payroll and benefits

 

459,094

 

509,484

Income taxes payable

 

2,186

 

20,960

Current portion of long-term debt

 

699,407

 

249,598

Total current liabilities

 

4,843,698

 

4,405,687

    Long-term debt

 

1,514,452

 

2,210,073

Non-current operating lease liabilities

 

2,821,417

 

2,640,068

Other long-term liabilities

 

265,673

 

218,970

Deferred income taxes

 

196,583

 

212,866

  Commitments and contingencies   Stockholders’ Equity

 

5,263,363

 

4,582,956

Total liabilities and stockholders’ equity

$

14,905,186

$

14,270,620

    Ross Stores, Inc. Condensed Consolidated Statements of Cash Flows     Nine Months Ended ($000, unaudited) November 2, 2024 October 28, 2023 Cash Flows From Operating Activities Net earnings

$

1,503,946

 

$

1,264,837

 

  Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization

 

329,584

 

 

300,366

 

Stock-based compensation

 

117,212

 

 

111,369

 

Deferred income taxes

 

345

 

 

(4,193

)

Change in assets and liabilities: Merchandise inventory

 

(666,886

)

 

(590,313

)

Other current assets

 

(62,793

)

 

(48,803

)

Accounts payable

 

390,398

 

 

259,105

 

Other current liabilities

 

(83,300

)

 

284,989

 

Income taxes

 

(64,016

)

 

(25,524

)

Operating lease assets and liabilities, net

 

11,057

 

 

8,336

 

Other long-term, net

 

(1,116

)

 

5,566

 

Net cash provided by operating activities

 

1,474,431

 

 

1,565,735

 

  Cash Flows From Investing Activities Additions to property and equipment

 

(514,122

)

 

(540,458

)

Net cash used in investing activities

 

(514,122

)

 

(540,458

)

  Cash Flows From Financing Activities Issuance of common stock related to stock plans

 

18,769

 

 

18,590

 

Treasury stock purchased

 

(86,092

)

 

(48,568

)

Repurchase of common stock

 

(787,479

)

 

(703,400

)

Excise tax paid on repurchase of common stock

 

(8,798

)

 

—

 

Dividends paid

 

(367,492

)

 

(342,132

)

Payment of long-term debt

 

(250,000

)

 

—

 

Net cash used in financing activities

 

(1,481,092

)

 

(1,075,510

)

  Net decrease in cash, cash equivalents, and restricted cash and cash equivalents

 

(520,783

)

 

(50,233

)

  Cash, cash equivalents, and restricted cash and cash equivalents: Beginning of period

 

4,935,441

 

 

4,612,241

 

End of period

$

4,414,658

 

$

4,562,008

 

  Reconciliations: Cash and cash equivalents

$

4,349,262

 

$

4,499,497

 

Restricted cash and cash equivalents included in prepaid expenses and other

 

15,041

 

 

13,127

 

Restricted cash and cash equivalents included in other long-term assets

 

50,355

 

 

49,384

 

Total cash, cash equivalents, and restricted cash and cash equivalents:

$

4,414,658

 

$

4,562,008

 

  Supplemental Cash Flow Disclosures Interest paid

$

80,316

 

$

80,316

 

Income taxes paid, net

$

546,113

 

$

440,419

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241121923724/en/

Adam Orvos Executive Vice President, Chief Financial Officer (925) 965-4550

Connie Kao Group Vice President, Investor Relations (925) 965-4668 connie.kao@ros.com