Ross Stores, the American retail chain, has reported a substantial increase in its net income for the third quarter of fiscal year 2024, reaching $489 million, which is an improvement compared to $447 million during the same period last year. Total sales for the quarter amounted to $5.1 billion, marking a 1 percent rise in comparable store sales—despite facing significant challenges such as rising costs affecting low-to-moderate income shoppers and severe weather disruptions.
The company’s earnings per share for the 13 weeks concluding on November 2, 2024, rose to $1.48, showing an increase from $1.33 in the previous year. In the year-to-date figures, for the nine months ending November 2, 2024, Ross Stores reported earnings per share of $4.53, an increase from $3.74 in the same period of 2023, with net earnings reaching $1.5 billion compared to $1.3 billion the prior year.
Sales during the first nine months of 2024 climbed to $15.2 billion, with comparable store sales up by 3 percent. However, CEO Barbara Rentler expressed disappointment over the third quarter sales performance, citing a slowdown in business momentum compared to the gains made in the first half of the year. Rentler highlighted the ongoing struggles of lower-income customers facing persistent high costs, which have constrained their spending abilities, and noted that adverse weather conditions, particularly hurricanes and unseasonably warm temperatures, also negatively impacted results.
Despite the below-expected sales, Ross Stores managed to exceed earnings expectations, achieving an operating margin of 11.9 percent, up from 11.2 percent last year. This uptick was largely attributed to decreased costs related to incentives, freight, and distribution, which effectively offset the anticipated decline in merchandise margins.
In a strategic move, the company repurchased 1.8 million shares, amounting to approximately $262 million during the quarter, and it remains committed to a broader plan to buy back a total of $1.05 billion in common stock as part of its two-year $2.1 billion repurchase initiative.
Looking forward, Rentler provided guidance for the upcoming quarter, projecting comparable store sales growth of 2 to 3 percent for the 13 weeks ending February 1, 2025. Earnings per share for the fourth quarter are expected to fall between $1.57 to $1.64, down from $1.82 for the 14-week period ending February 3, 2024. This outlook takes into account an estimated unfavorable impact of about $0.03 per share due to timing of expenses linked to inventory management.
Rentler concluded with a note of confidence in the company’s strategy to deliver compelling value to customers, viewing it as crucial for sustaining profitable growth both now and in the future.
