01—Abstract
Summary
Summary of the 8-K filed March 4, 2025. Cited figures are marked; the original filing is the authoritative source.
Ross Stores (ROST) reported fourth-quarter and fiscal 2024 results on March 4, 2025, with Q4 diluted EPS of $1.79a (vs. $1.82 last year) on sales of $5.9 billion (vs. $6.0 billion in the prior 14-week quarter) and comparable store sales up 3% against a 7% gain a year earlier.
Full-year fiscal 2024 diluted EPS was $6.32b (up from $5.56), on sales of $21.1 billion and net earnings of $2.1 billion. Results were helped by a one-time benefit of roughly $0.14 per share from the sale of a packaway facility, which lifted Q4 operating margin to 12.4%, flat year over year despite planned merchandise margin declines. Excluding the facility gain, underlying profitability was weaker than the headline figures suggest, and the prior-year comparison was inflated by a 53rd week.
The more consequential news for investors is the cautious outlook. Management said sales trends softened from late January into February, which it attributed to unseasonable weather and macroeconomic and geopolitical volatility. For Q1 fiscal 2025, comparable store sales are forecast to fall 3% to flat, with EPS of $1.33 to $1.47c versus $1.46 last year.
For the full fiscal 2025, guidance calls for comps of -1% to +2% and EPS of $5.95 to $6.55d, below the $6.32 reported for fiscal 2024 even before adjusting for the one-time gain. Capital return remains a priority. The company repurchased 7.3 million shares for $1.05 billion in fiscal 2024, expects to complete the remaining $1.05 billion under its two-year $2.1 billion authorization in fiscal 2025, and raised the quarterly dividend 10% to $0.405 per share.
Management ended the year with $4.7 billion in cash and cash equivalents, and it described some current challenges as potentially transitory. Investors will be watching whether the softer sales trend reverses and whether the guided margin and EPS range holds.
02—Key points
Key Highlights
- Q4 FY2024 diluted EPS of $1.79 vs. $1.82 prior year; sales of $5.9B vs. $6.0B, with comparable store sales up 3% against a 7% comp last year.
- Full-year FY2024 diluted EPS of $6.32 (up from $5.56) on sales of $21.1B and net earnings of $2.1B, though both Q4 and full-year figures include a one-time ~$0.14/share benefit from a packaway facility sale.
- Q4 operating margin of 12.4%, flat year over year; the facility sale added about 105 bps, offsetting planned merchandise margin declines and packaway cost timing.
- Cautious Q1 FY2025 guidance: comps of -3% to flat and EPS of $1.33 to $1.47 (vs. $1.46 last year).
- Full-year FY2025 guidance: comps of -1% to +2% and EPS of $5.95 to $6.55, below FY2024's $6.32, which included the $0.14 one-time benefit.
- Shareholder returns: $1.05B of buybacks in FY2024, with the remaining $1.05B under the $2.1B program expected to be completed in FY2025, and a 10% dividend increase to $0.405 per quarter.
- Management cited softening sales from late January into February, attributed to unseasonable weather and macroeconomic and geopolitical volatility, and ended FY2024 with $4.7B in cash.
03—Questions
Frequently Asked Questions
Why did Ross Stores' earnings per share decline in Q4 even though operating margin held flat?
Q4 diluted EPS fell to $1.79 from $1.82 as sales declined about 2% to $5.9 billion from $6.0 billion. The prior-year quarter was a 14-week period that included a 53rd week worth about $308 million in sales and $0.20 per share. Operating margin was flat at 12.4%, but the one-time packaway facility sale that helped the margin was offset by planned merchandise margin declines and unfavorable timing of packaway-related costs.
How much of fiscal 2024's earnings came from one-time items?
Both Q4 and full-year fiscal 2024 results included a one-time benefit of about $0.14 per share from the sale of a packaway facility. Excluding this gain, full-year diluted EPS would be roughly $6.18 rather than $6.32, which is a useful baseline when comparing against the fiscal 2025 guidance range of $5.95 to $6.55.
What is the outlook for fiscal 2025, and why is management cautious?
For Q1 fiscal 2025, the company expects comparable store sales of -3% to flat and EPS of $1.33 to $1.47. For the full year, it guides to comps of -1% to +2% and EPS of $5.95 to $6.55. Management said sales softened from late January into February, citing unseasonable weather and macroeconomic and geopolitical volatility, and said it is taking a prudent approach given limited visibility into these external factors.
How is Ross returning capital to shareholders?
In fiscal 2024 the company repurchased 7.3 million shares for $1.05 billion under its two-year $2.1 billion program and expects to complete the remaining $1.05 billion in fiscal 2025. The board also approved a 10% increase in the quarterly cash dividend to $0.405 per share, payable March 31, 2025 to holders of record on March 18, 2025. Fiscal 2024 dividends paid totaled about $489 million.
Is Ross's balance sheet strong enough to support these shareholder returns?
Ross ended fiscal 2024 with $4.7 billion in cash and cash equivalents and $2.2 billion in total debt (including the current portion), after repaying $250 million of long-term debt during the year. Operating cash flow was $2.36 billion, which covered capital expenditures of $720 million, buybacks of about $1.05 billion, and dividends of about $489 million. The company repurchased those shares while keeping a substantial cash position.
04—Continue