In the latest financial update, US retailer Ross Stores has announced a remarkable increase in its net income, reaching $489 million in the third quarter of fiscal year 2024. This marks a significant rise from the $447 million reported during the same period last year. The company’s sales also showed a robust performance, climbing to $5.1 billion, with a modest 1 percent boost in comparable store sales.
Despite facing noteworthy hurdles, including rising costs impacting low-to-moderate income customers and severe weather challenges, Ross’s earnings managed to surpass expectations. The retailer also engaged in a stock buyback, repurchasing 1.8 million shares within the quarter.
CEO Barbara Rentler expressed mixed feelings regarding the quarter’s sales, pointing out that while the earnings exceeded projections, they did not align with the strong results recorded in the first half of 2024. She noted that the persistent financial pressures on their customer base affected discretionary spending, coupled with adverse weather effects from Hurricanes Helene and Milton, as well as unseasonably warm temperatures, that hampered business.
For the 13 weeks that ended on November 2, 2024, Ross reported earnings per share of $1.48, a rise from $1.33 per share from the same timeframe in the previous year. Looking at the nine-month period ending November 2, 2024, earnings per share hit $4.53, up from $3.74 over the same year-to-date segment in 2023, with total sales reaching $15.2 billion and comparable store sales increasing by 3 percent.
Rentler conveyed ambition for the fourth quarter, projecting a 2 to 3 percent increase in comparable store sales and forecasting earnings per share within $1.57 to $1.64, lower than the $1.82 recorded during the 14-week period ending February 3, 2024. This guidance factor accounts for an anticipated unfavorable impact of around $0.03 per share primarily due to the timing of some packaway-related expenses that had positively contributed in the third quarter.
For the fiscal year ending February 1, 2025, the company now expects total earnings per share to be between $6.10 and $6.17. This is a notable increase from the $5.56 reported in the prior year, with a reminder that the 2023 fourth quarter benefitted from an additional week of sales.
In conclusion, Rentler remains optimistic about Ross Stores’ strategic commitment to delivering value and capitalizing on growth opportunities in the future.
