01—Abstract
Summary
Summary of the 10-Q filed June 11, 2025. Cited figures are marked; the original filing is the authoritative source.
Ross Stores, Inc. (ROST) reported its first quarter fiscal year 2025 results, showing a modest increase in sales of 2.6% year-over-year to $4.985 billiona, driven primarily by the addition of new stores.
While total sales grew, comparable store sales were flat, indicating that sales growth is largely dependent on store expansion rather than increased traffic or sales per store. Net earnings saw a slight decrease to $479.2 millionb, or $1.47 per diluted share, compared to $488.0 million, or $1.46 per diluted share, in the prior year's first quarter. The company is navigating a challenging macroeconomic environment characterized by inflation and evolving trade policies, which are impacting merchandise margins due to higher freight and potential tariff costs.
02—Key points
Key Highlights
- Sales increased by 2.6% to $4.985 billion for the first quarter of fiscal 2025, primarily due to the opening of 78 net new stores since the prior year's first quarter.
- Comparable store sales were flat (0%) for the quarter, indicating no growth from existing store performance.
- Net earnings decreased slightly to $479.2 million from $487.9 million in the prior year's quarter. Diluted EPS was $1.47, a slight increase from $1.46.
- The company repurchased $262.5 million of common stock during the quarter under its $2.1 billion repurchase program, with $787.5 million remaining available as of May 3, 2025.
- Operating income as a percentage of sales remained stable at 12.2%, but the company anticipates a decrease in the second quarter due to lower merchandise margins from tariffs and higher distribution costs from a new distribution center.
- The company's cash and cash equivalents stood at $3.8 billion, providing a strong liquidity position, with an additional $1.3 billion available under its revolving credit facility.
- Planned capital expenditures for fiscal 2025 are projected to be approximately $855 million, primarily for new store openings and supply chain investments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Ross Stores, Inc. kept $0.10.
- Revenue$4.98B100.0%
- Cost of revenue−$3.58B71.8%
- Gross profit$1.40B28.2%
- Operating costs−$797.1M16.0%
- Operating income$606.5M12.2%
- Interest, other & tax−$127.2M2.6%
- Net income$479.2M9.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed June 11, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $4.98B$4.86B | +2.6% |
| Cost of Revenue | $3.58B$3.49B | +2.6% |
| Gross Profit | $1.40B$1.37B | +2.6% |
| SG&A Expenses | $797.13M$776.28M | +2.7% |
| Operating Income | $606.47M$591.11M | +2.6% |
| Net Income | $479.25M$487.99M | −1.8% |
| EPS (Basic) | $1.48$1.47 | +0.7% |
| EPS (Diluted) | $1.47$1.46 | +0.7% |
| Shares Outstanding (Basic) | 324.88M331.26M | −1.9% |
| Shares Outstanding (Diluted) | 327.00M333.74M | −2.0% |
05—Questions
Frequently Asked Questions
What drove the sales growth in the first quarter?
Sales growth of 2.6% to $4.985 billion was primarily driven by the opening of 78 net new stores between May 4, 2024, and May 3, 2025. Comparable store sales remained flat.
How are tariffs and inflation impacting the company's margins?
The company is experiencing pressure on merchandise margins due to higher ocean freight costs and the initial impact of tariffs. Management expects merchandise margins to decrease in the second quarter due to the impact of announced tariffs.
What is the company's outlook for the second quarter?
The company anticipates operating income to decrease as a percentage of sales in the second quarter compared to the prior year. This is expected due to lower merchandise margins primarily from tariffs and higher distribution costs from the opening of a new distribution center, partially offset by lower incentive compensation expense.
How is the company managing its cash and debt?
Ross Stores maintains a strong liquidity position with $3.8 billion in unrestricted cash and cash equivalents and $1.3 billion available under its revolving credit facility. The company repaid $700 million of Senior Notes in April 2025. The stock repurchase program remains active, and the company continues to pay regular dividends.
06—Continue