Ross Stores, a prominent US retailer, has announced a significant increase in its net income for the third quarter of fiscal year 2024, reporting $489 million compared to $447 million during the same period last year. The company achieved sales totaling $5.1 billion, reflecting a 1 percent rise in comparable store sales. Despite facing challenges such as escalating costs impacting low-to-moderate income customers and the adverse effects of severe weather, the earnings surpassed expectations.
In the third quarter, Ross Stores repurchased 1.8 million shares, showing a commitment to enhancing shareholder value. Earnings per share for the thirteen weeks ending November 2, 2024, stood at $1.48, a notable increase from $1.33 per share during the equivalent period in 2023. For the nine months concluding on November 2, 2024, the company reported earnings per share of $4.53, marking an increase compared to $3.74 in the same timeframe of the previous year. Cumulatively, sales for the first nine months of fiscal 2024 reached $15.2 billion, with comparable store sales rising by 3 percent year-over-year.
Barbara Rentler, the CEO of Ross Stores, expressed some disappointment regarding the third quarter sales performance, as the business experienced a slowdown compared to the robust results seen in the first half of 2024. She attributed part of this decline to the ongoing financial struggles faced by low-to-moderate income consumers, which have pressured their discretionary spending. Additionally, external factors, including severe weather conditions from Hurricanes Helene and Milton, as well as unusually warm temperatures, had a negative impact on the company’s financial results.
Despite the decline in sales, Rentler noted that earnings remained ahead of their expectations. The operating margin for the quarter improved to 11.9 percent from 11.2 percent the previous year, aided by reduced incentive, freight, and distribution costs, which more than offset a planned decline in merchandise margin. She indicated that the company was on track to buy back a total of $1.05 billion in common stock as part of a larger repurchase program valued at $2.1 billion over two years.
Looking ahead, Rentler remains optimistic, projecting a 2 percent to 3 percent increase in comparable store sales for the 13 weeks ending February 1, 2025. The forecast for earnings per share for the fourth quarter is estimated to range between $1.57 and $1.64, in contrast to $1.82 for the 14 weeks ending February 3, 2024. This guidance considers an estimated impact of $0.03 per share due to the timing of certain expenses that favorably influenced the third quarter results.
By focusing on delivering compelling values, Rentler expressed her confidence in the company’s potential for profitable growth both now and in the future.
