Ross Stores, which is a US off-price apparel and home fashion chain, also saw its earnings per share increase to $1.48 in Q3, compared to $1.33 per share in the same period last year.
For Q3 ending 2 November 2024, Ross Stores’ sales rose by 2.9% to $5.07bn from $4.92bn, marking a year-over-year (YoY) increase with comparable store sales growing by 1%.
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Ross Stores chief executive officer Barbara Rentler said: “Despite the below-plan sales results, earnings were ahead of our expectations. Operating margin for the quarter was 11.9%, up from 11.2% last year, as lower incentive, freight, and distribution costs more than offset the planned decline in merchandise margin.”
Rentler added: “We are disappointed with our third quarter sales results as business slowed from the solid gains we reported in the first half of 2024.
“Although our low-to-moderate income customers continue to face persistently high costs on necessities pressuring their discretionary spending, we believe we should have better executed some of our merchandising initiatives. In addition, a combination of severe weather during the quarter from Hurricanes Helene and Milton, along with unseasonably warm temperatures, also negatively impacted our results.”
Over the first three quarters of the fiscal year, the retailer’s net earnings climbed to $1.50bn, up from $1.26bn during the same period in 2023.
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By GlobalDataThe company’s earnings per share stood at $4.53 for the first nine months of fiscal 2024, an improvement from $3.74 per share in the prior year.
Total sales for this period reached $15.21bn, an increase from $14.35bn last year, with comparable store sales witnessing a 3% uptick.
Fourth quarter and Fiscal 2024 outlook
In the fourth quarter ending 1 February 2025, Ross Stores anticipates comparable store sales to grow between 2% to 3%. The EPS are projected to be between $1.57 and $1.64, which includes an unfavourable impact from packaway-related expenses.
For the full fiscal year ending on 1 February 2025, earnings per share are expected to range from $6.10 to $6.17, compared to last year’s $5.56, which included an extra week of sales.
Rentler concluded: “We remain confident that our ongoing focus and commitment to delivering the most compelling values possible will enable us to maximise our potential for profitable growth now and in the future.”
Headquartered in Dublin, California, Ross Stores operates across 43 US states, Washington DC, and Guam.
During the earnings call with analysts Rentler welcomed Jim Conroy who will take on the role of CEO-elect at Ross Stores next month. After a two-month transition period, he will officially step into the CEO position on 2 February 2025.
Rentler also noted that the company plans to close and/or relocate seven stores in the fourth quarter, with the expectation of ending the year with a total of 1,831 Ross stores and 354 DD’s Discount locations.
