US retail giant Ross Stores has reported an impressive net income surge to $489 million for the third quarter of fiscal year 2024, marking a rise from $447 million during the same period last year. This positive momentum comes as sales increased to $5.1 billion, coupled with a modest 1 percent boost in comparable store sales. Despite facing headwinds such as rising costs affecting low-to-moderate income shoppers and adverse weather conditions, the company’s earnings surpassed analysts’ expectations.
During the third quarter ending November 2, 2024, Ross Stores announced earnings per share of $1.48, a rise from $1.33 noted in the previous year. For the year-to-date period, the retailer posted net earnings of $1.5 billion, leading to earnings per share of $4.53, a notable increase from $3.74 the previous year. Total sales for the first nine months of 2024 climbed to $15.2 billion, with comparable store sales enjoying a healthy 3 percent rise year over year.
In a press briefing, CEO Barbara Rentler acknowledged disappointment regarding the sales performance, attributing it to a slowdown from the first half of 2024. Rentler pointed to persistent high costs for essential goods impacting discretionary spending among their core customer base. The impact of severe weather events like Hurricanes Helene and Milton, alongside unseasonably warm weather, was also highlighted as a factor that negatively influenced sales.
Notably, the company’s operating margin improved to 11.9 percent, up from 11.2 percent the previous year, as reductions in incentive, freight, and distribution costs more than offset a planned dip in merchandise margins. Ross Stores also executed a significant share repurchase of 1.8 million shares during the quarter for a total expenditure of $262 million, remaining on course to buy back a total of $1.05 billion in common stock under its ongoing $2.1 billion repurchase initiative.
Looking ahead, Rentler provided insight into future expectations, forecasting a 2 to 3 percent growth in comparable store sales for the upcoming 13 weeks ending February 1, 2025. Earnings per share for the fourth quarter are projected within the range of $1.57 to $1.64, a decrease compared to $1.82 reported for the 14 weeks that ended February 3, 2024. This projection includes an estimated adverse effect of $0.03 per share due to the timing of related expenses that had previously benefited the third quarter.
For the fiscal year ending February 1, 2025, earnings per share are now anticipated between $6.10 and $6.17, reflecting a notable increase from last year’s $5.56. Rentler concluded with confidence in the company’s strategic focus on providing value, asserting that these efforts will maximize opportunities for sustainable growth both now and in the future.
