Ross Stores Reports First Quarter Earnings
Ross Stores (NASDAQ: ROST) reported its first quarter earnings for the 13 weeks ending May 4, 2024, with earnings per share (EPS) of $1.46 and net earnings of $488 million. This marks a significant increase compared to the previous year's EPS of $1.09 and net income of $371 million. The company's sales grew by 8% to $4.9 billion, and comparable sales rose by 3%.
The operating margin improved to 12.2%, up from 10.1% in the last year's first quarter, attributed to lower distribution, incentive, and freight costs. Ross Stores repurchased 1.9 million shares for $262 million under a new $2.1 billion buyback authorization approved in March 2024.
Looking ahead, Ross Stores forecasts comparable store sales to rise 2% to 3% for the second quarter ending August 3, 2024, with EPS projected to be between $1.43 to $1.49. For fiscal 2024, EPS is expected to range from $5.79 to $5.98, up from $5.56 in fiscal 2023.
- First quarter 2024 EPS increased to $1.46 from $1.09 in Q1 2023.
- Net earnings grew to $488 million, up from $371 million in the previous year.
- Sales rose by 8% to $4.9 billion.
- Comparable sales increased by 3%.
- Operating margin improved to 12.2%, up 205 basis points from 10.1% last year.
- Lower distribution, incentive, and freight costs contributed to margin improvement.
- Repurchased 1.9 million shares for $262 million under a new $2.1 billion buyback authorization.
- Projected Q2 2024 EPS is between $1.43 to $1.49, higher than $1.32 in the prior year.
- Fiscal 2024 EPS guidance increased to $5.79-$5.98 from $5.56 in fiscal 2023.
- First quarter sales were only in line with guidance despite macroeconomic headwinds.
- Planned decline in merchandise margin partially offset the operating margin improvement.
- Ongoing uncertainty in macroeconomic and geopolitical environments, including prolonged inflation, may pressure customer spending.
Insights
Ross Stores has reported a commendable first quarter for 2024 with earnings per share (EPS) of
From an investor's perspective, the substantial stock repurchase program, with
The 8% sales growth in the first quarter of 2024 for Ross Stores is noteworthy, especially given the current economic pressures on discretionary spending. Comparable store sales growing by
The company's ability to project a
Ross Stores' operational improvements are a key highlight of this earnings report. The rise in operating margin from
Investors should take note of how operational efficiency plays a important role in enhancing overall profitability. The company's continued focus on tight inventory and expense management aligns with its strategy to maximize sales and earnings growth throughout the year. This approach not only supports current earnings but also positions the company well for long-term sustainability.
Provides Second Quarter and Updated Fiscal 2024 Guidance
Barbara Rentler, Chief Executive Officer, commented, “Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending. Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan.”
Ms. Rentler continued, “Operating margin of
During the first quarter of fiscal 2024, a total of 1.9 million shares of common stock were repurchased for an aggregate price of
Fiscal 2024 Guidance
Looking ahead, Ms. Rentler commented, “Ongoing uncertainty in today’s macroeconomic and geopolitical environments, including prolonged inflation, continue to squeeze our low-to-moderate income customers’ purchasing power. As a result, we believe it is more important than ever to offer our customers the best branded values possible. In addition, we will continue to manage inventory and expenses tightly in order to maximize sales and earnings growth over the balance of the year.”
Ms. Rentler continued, “For the 13 weeks ending August 3, 2024, comparable store sales are projected to increase
Ms. Rentler added, “Based on our first quarter results and forward guidance, comparable store sales for the 52 weeks ending February 1, 2025 remain unchanged at up
The Company will host a conference call on Thursday, May 23, 2024 at 4:15 p.m. Eastern time to provide additional details concerning its first quarter results and management’s outlook for the second quarter and fiscal year 2024. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at www.rossstores.com. An audio playback will be available at 201-612-7415, PIN #13746503 until 8:00 p.m. Eastern time on May 30, 2024, as well as on the Company’s website.
Forward-Looking Statements: This press release and the related conference call remarks contain forward-looking statements regarding, without limitation, projected sales, costs, and earnings, planned new store growth, capital expenditures, and other matters. These forward-looking statements reflect our then-current beliefs, plans, and estimates with respect to future events and our projected financial performance and operations, and they are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “target,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “outlook,” “looking ahead,” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without limitation, uncertainties arising from the macroeconomic environment, including inflation, high interest rates, housing costs, energy and fuel costs, financial and credit market conditions, recession concerns, geopolitical conditions, public health and public safety issues that affect our costs, consumer confidence, and consumer disposable income and shopping behavior as well as costs; unexpected changes in the level of consumer spending on, or preferences for, apparel and home-related merchandise, which could adversely affect us; competitive pressures in the apparel and home-related merchandise retailing industry; our need to effectively manage our inventories, markdowns, and inventory shortage in order to achieve our planned gross margins; risks associated with importing and selling merchandise produced in other countries, including risks from supply chain disruption, shipping delays, and higher than expected ocean freight costs; unseasonable weather or extreme temperatures that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise; our dependence on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to anticipate consumer preferences and to purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices; information or data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could disrupt our operations, and result in theft or unauthorized disclosure of confidential and valuable business information, such as customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business; disruptions in our supply chain or in our information systems, including from ransomware or other cyber-attacks, that could impact our ability to process sales and to deliver product to our stores in a timely and cost-effective manner; our need to obtain acceptable new store sites with favorable consumer demographics to achieve our planned new store openings; our need to expand in existing markets and enter new geographic markets in order to achieve planned market penetration; consumer problems or legal issues involving the quality, safety, or authenticity of products we sell, which could harm our reputation, result in lost sales, and/or increase our costs; an adverse outcome in various legal, regulatory, or tax matters, or the adoption of new federal or state tax legislation that increases tax rates or adds new taxes, that could increase our costs; damage to our corporate reputation or brands that could adversely affect our sales and operating results; our need to continually attract, train, and retain associates with the retail talent necessary to execute our off-price retail strategies; our need to effectively advertise and market our business; changes in
About Ross Stores, Inc.
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in
| Ross Stores, Inc. | ||||||||
| Condensed Consolidated Statements of Earnings | ||||||||
| Three Months Ended | ||||||||
| ( |
May 4, 2024 |
April 29, 2023 |
||||||
| Sales | $ |
4,858,067 |
|
$ |
4,494,686 |
|
||
| Costs and Expenses | ||||||||
| Cost of goods sold |
|
3,490,672 |
|
|
3,292,606 |
|
||
| Selling, general and administrative |
|
776,282 |
|
|
746,222 |
|
||
| Interest income, net |
|
(45,950 |
) |
|
(31,397 |
) |
||
| Total costs and expenses |
|
4,221,004 |
|
|
4,007,431 |
|
||
| Earnings before taxes |
|
637,063 |
|
|
487,255 |
|
||
| Provision for taxes on earnings |
|
149,073 |
|
|
116,064 |
|
||
| Net earnings | $ |
487,990 |
|
$ |
371,191 |
|
||
| Earnings per share | ||||||||
| Basic | $ |
1.47 |
|
$ |
1.10 |
|
||
| Diluted | $ |
1.46 |
|
$ |
1.09 |
|
||
| Weighted-average shares outstanding (000) | ||||||||
| Basic |
|
331,258 |
|
|
338,049 |
|
||
| Diluted |
|
333,737 |
|
|
340,044 |
|
||
| Store count at end of period |
|
2,127 |
|
|
2,034 |
|
||
| Ross Stores, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| ( |
May 4, 2024 |
April 29, 2023 |
||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ |
4,654,316 |
$ |
4,416,480 |
||
| Accounts receivable |
|
165,436 |
|
170,816 |
||
| Merchandise inventory |
|
2,461,699 |
|
2,241,735 |
||
| Prepaid expenses and other |
|
225,911 |
|
210,597 |
||
| Total current assets |
|
7,507,362 |
|
7,039,628 |
||
| Property and equipment, net |
|
3,515,193 |
|
3,224,733 |
||
| Operating lease assets |
|
3,210,455 |
|
3,122,474 |
||
| Other long-term assets |
|
258,772 |
|
232,069 |
||
| Total assets | $ |
14,491,782 |
$ |
13,618,904 |
||
| Liabilities and Stockholders’ Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ |
2,119,114 |
$ |
2,061,529 |
||
| Accrued expenses and other |
|
612,244 |
|
607,294 |
||
| Current operating lease liabilities |
|
679,596 |
|
654,709 |
||
| Accrued payroll and benefits |
|
313,305 |
|
299,465 |
||
| Income taxes payable |
|
212,700 |
|
158,170 |
||
| Current portion of long-term debt |
|
948,590 |
|
— |
||
| Total current liabilities |
|
4,885,549 |
|
3,781,167 |
||
| Long-term debt |
|
1,513,200 |
|
2,457,561 |
||
| Non-current operating lease liabilities |
|
2,693,259 |
|
2,619,466 |
||
| Other long-term liabilities |
|
245,096 |
|
222,463 |
||
| Deferred income taxes |
|
206,726 |
|
227,851 |
||
| Commitments and contingencies | ||||||
| Stockholders’ Equity |
|
4,947,952 |
|
4,310,396 |
||
| Total liabilities and stockholders’ equity | $ |
14,491,782 |
$ |
13,618,904 |
||
| Ross Stores, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| Three Months Ended | ||||||||
| ( |
May 4, 2024 |
April 29, 2023 |
||||||
| Cash Flows From Operating Activities | ||||||||
| Net earnings | $ |
487,990 |
|
$ |
371,191 |
|
||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
| Depreciation and amortization |
|
109,186 |
|
|
99,379 |
|
||
| Stock-based compensation |
|
40,447 |
|
|
33,063 |
|
||
| Deferred income taxes |
|
10,488 |
|
|
10,792 |
|
||
| Change in assets and liabilities: | ||||||||
| Merchandise inventory |
|
(269,479 |
) |
|
(218,240 |
) |
||
| Other current assets |
|
(57,685 |
) |
|
(51,914 |
) |
||
| Accounts payable |
|
179,376 |
|
|
46,577 |
|
||
| Other current liabilities |
|
(269,973 |
) |
|
16,336 |
|
||
| Income taxes |
|
138,959 |
|
|
105,225 |
|
||
| Operating lease assets and liabilities, net |
|
2,267 |
|
|
(102 |
) |
||
| Other long-term, net |
|
(2,655 |
) |
|
845 |
|
||
| Net cash provided by operating activities |
|
368,921 |
|
|
413,152 |
|
||
| Cash Flows From Investing Activities | ||||||||
| Additions to property and equipment |
|
(136,249 |
) |
|
(167,253 |
) |
||
| Net cash used in investing activities |
|
(136,249 |
) |
|
(167,253 |
) |
||
| Cash Flows From Financing Activities | ||||||||
| Issuance of common stock related to stock plans |
|
6,224 |
|
|
6,149 |
|
||
| Treasury stock purchased |
|
(70,480 |
) |
|
(37,522 |
) |
||
| Repurchase of common stock |
|
(262,479 |
) |
|
(234,468 |
) |
||
| Dividends paid |
|
(123,298 |
) |
|
(114,794 |
) |
||
| Net cash used in financing activities |
|
(450,033 |
) |
|
(380,635 |
) |
||
| Net decrease in cash, cash equivalents, and restricted cash and cash equivalents |
|
(217,361 |
) |
|
(134,736 |
) |
||
| Cash, cash equivalents, and restricted cash and cash equivalents: | ||||||||
| Beginning of period |
|
4,935,441 |
|
|
4,612,241 |
|
||
| End of period | $ |
4,718,080 |
|
$ |
4,477,505 |
|
||
| Reconciliations: | ||||||||
| Cash and cash equivalents | $ |
4,654,316 |
|
$ |
4,416,480 |
|
||
| Restricted cash and cash equivalents included in prepaid expenses and other |
|
14,666 |
|
|
12,815 |
|
||
| Restricted cash and cash equivalents included in other long-term assets |
|
49,098 |
|
|
48,210 |
|
||
| Total cash, cash equivalents, and restricted cash and cash equivalents: | $ |
4,718,080 |
|
$ |
4,477,505 |
|
||
| Supplemental Cash Flow Disclosures | ||||||||
| Interest paid | $ |
40,158 |
|
$ |
40,158 |
|
||
| Income taxes (refunded) paid, net | $ |
(375 |
) |
$ |
47 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240523559859/en/
Adam Orvos
Executive Vice President,
Chief Financial Officer
(925) 965-4550
Connie Kao
Group Vice President, Investor Relations
(925) 965-4668
connie.kao@ros.com
Source: Ross Stores, Inc.
FAQ
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