10-QPeriod: Q3 FY2025

ROSS STORES, INC. Quarterly Report for Q3 Ended Nov 2, 2024

Filed December 11, 2024For Securities:ROST

Summary

Ross Stores, Inc. reported solid financial results for the third quarter and nine months ending November 2, 2024. The company demonstrated continued sales growth, with a 3.0% increase in the third quarter and 6.0% for the nine-month period, driven by both new store openings and positive comparable store sales growth. Profitability also improved, with net earnings as a percentage of sales rising to 9.6% in the quarter and 9.9% year-to-date, reflecting effective cost management in cost of goods sold and selling, general, and administrative expenses. Financially, Ross Stores maintained a strong balance sheet with substantial cash and cash equivalents. The company continued its capital allocation strategy through robust share repurchases and consistent dividend payments. Management expressed confidence in their ability to navigate the current economic environment, characterized by persistent cost pressures for low-to-moderate income customers, by focusing on delivering value and executing merchandising initiatives.

Financial Highlights

49 data points
Beta

Revenue

$5.07B

28.3% Gross Margin

Net Income

$488.81M

9.6% Net Margin

EPS (Diluted)

$1.48

Total Assets

$14.91B

Cash & Equivalents

$4.35B

Free Cash Flow

$333.00M

Financial Statements
Beta
Revenue$5.07B
Cost of Revenue$3.63B
Gross Profit$1.44B
SG&A Expenses$832.86M
Operating Expenses$4.42B
Operating Income$604.22M
Net Income$488.81M
EPS (Basic)$1.49
EPS (Diluted)$1.48
Shares Outstanding (Basic)327.71M
Shares Outstanding (Diluted)329.94M

Key Highlights

  • 1Total sales increased by 3.0% to $5.07 billion for the third quarter and 6.0% to $15.22 billion for the nine-month period.
  • 2Comparable store sales increased by 1% for the third quarter and 3% for the nine-month period.
  • 3Net earnings increased by 9.2% to $488.8 million for the third quarter and 19.0% to $1.50 billion for the nine-month period.
  • 4Diluted earnings per share rose to $1.48 for the third quarter and $4.53 for the nine-month period, up from $1.33 and $3.74 respectively, in the prior year.
  • 5The company opened 47 new stores in the third quarter, contributing to a total of 2,192 stores across its Ross Dress for Less and dd's DISCOUNTS banners.
  • 6Ross Stores repurchased approximately $787.5 million of its common stock during the nine-month period, reflecting a continued commitment to returning capital to shareholders.
  • 7Operating cash flow remained strong, providing $1.47 billion for the nine-month period, supporting investments and capital allocation.

Frequently Asked Questions

For the third quarter ended November 2, 2024, total sales increased by 3.0% to $5.07 billion compared to the same period last year. For the nine-month period ended November 2, 2024, total sales grew by 6.0% to $15.22 billion, driven by both new store openings and a 3% increase in comparable store sales.

Profitability has improved, with net earnings increasing by 9.2% to $488.8 million in the third quarter and by 19.0% to $1.50 billion for the nine months. This improvement, reflected in higher net earnings as a percentage of sales (9.6% for the quarter and 9.9% year-to-date), is attributed to lower cost of goods sold and selling, general, and administrative (SG&A) expenses. These cost reductions were primarily due to lower buying costs, distribution costs, domestic freight costs, and incentive compensation expenses.

Ross Stores demonstrated strong capital management. They repurchased approximately $787.5 million of common stock during the first nine months of the fiscal year under a new $2.1 billion repurchase program approved in March 2024. Additionally, the company continued to pay quarterly cash dividends, with $367.5 million distributed in the first nine months of the fiscal year. The company ended the quarter with $4.3 billion in unrestricted cash balances and maintained availability under its $1.3 billion revolving credit facility.

The company continues its strategic store expansion. In the third quarter of fiscal 2024, they opened 47 new stores, bringing the total to 2,192 stores across its Ross Dress for Less and dd's DISCOUNTS banners. Management's long-term strategy includes opening additional stores based on market penetration and demographic characteristics.