Summary
Ross Stores, Inc. reported a strong third quarter for fiscal year 2023, with a significant increase in sales and net earnings compared to the prior year period. Sales grew by 7.9% driven by a 5% comparable store sales increase and the addition of new locations. This top-line growth translated into a substantial improvement in profitability, with net earnings per diluted share rising to $1.33 from $1.00 in the same quarter last year. The company also demonstrated robust operating cash flow, underscoring its financial strength and ability to fund growth initiatives, shareholder returns, and debt obligations.
Financial Highlights
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Financial Statements
Beta
| Revenue | $4.92B |
| Cost of Revenue | $3.56B |
| Gross Profit | $1.36B |
| SG&A Expenses | $810.47M |
| Operating Expenses | $4.33B |
| Net Income | $447.33M |
| EPS (Basic) | $1.34 |
| EPS (Diluted) | $1.33 |
| Shares Outstanding (Basic) | 334.28M |
| Shares Outstanding (Diluted) | 336.26M |
Key Highlights
- 1Sales increased by 7.9% to $4.92 billion for the third quarter, with comparable store sales growing by 5%.
- 2Net earnings for the quarter rose by 30.7% to $447.3 million, or $1.33 per diluted share, compared to $1.00 in the prior year quarter.
- 3The company opened 97 new locations in the first nine months of fiscal 2023, expanding its store base.
- 4Cost of goods sold as a percentage of sales decreased by 260 basis points, primarily due to improved merchandise margin driven by lower freight costs.
- 5Selling, general and administrative (SG&A) expenses as a percentage of sales increased by 125 basis points, mainly due to higher incentive compensation and store wages.
- 6Net cash provided by operating activities for the nine-month period was a strong $1.6 billion, indicating healthy cash generation.
- 7The company continued its capital allocation strategy by repurchasing $703.4 million of common stock and paying $342.1 million in dividends during the first nine months of fiscal 2023.
Frequently Asked Questions
Ross Stores reported a 7.9% increase in sales, reaching $4.92 billion for the third quarter ended October 28, 2023. This growth was supported by a 5% increase in comparable store sales and the addition of new stores.
Profitability improved significantly, with net earnings increasing by 30.7% to $447.3 million. Diluted earnings per share rose to $1.33 from $1.00 in the comparable prior-year quarter. This improvement was driven by higher sales and better cost management, particularly in the cost of goods sold.
While the cost of goods sold as a percentage of sales decreased due to factors like lower freight costs, selling, general, and administrative (SG&A) expenses as a percentage of sales increased. This increase was primarily attributed to higher incentive compensation and store wages, reflecting investments in employees and operational costs.
Ross Stores generated robust operating cash flow, with $1.6 billion provided by operating activities in the first nine months of fiscal 2023. The company also maintained a strong liquidity position with $4.5 billion in unrestricted cash and cash equivalents at the end of the quarter.