Ross Stores Defies Mixed Quarterly Figures with Solid Outlook

At the American retailer Ross Stores, a specialist in affordable fashion and home textiles, the third fiscal quarter was marked by stable, though not spectacular, revenue development. Investors were pleased with an increase in earnings per share to $1.48, up from $1.33 in the same period of the previous year. Despite a sales growth of only 2.9% to $5.07 billion, CEO Barbara Rentler expressed satisfaction and highlighted the increased operating margin of 11.9%. This was achieved through reduced incentive, freight, and distribution costs, despite a planned decrease in the merchandise margin. Rentler admitted that the company was not entirely satisfied with third-quarter sales, following significantly more positive results in the first six months of 2024. The purchasing power of the core clientele, characterized by low to medium income, remained under pressure due to high living costs. This was compounded by unfavorable weather conditions caused by Hurricanes Helene and Milton and unusually warm temperatures. Nevertheless, the first three quarters of the fiscal year were successful, with net profits rising to $1.50 billion. Earnings per share climbed to $4.53. Overall, sales during this period increased by 3% to $15.21 billion. For the last quarter, Ross Stores forecasts a sales growth of between 2% and 3% at comparable stores. Earnings per share are expected to range between $1.57 and $1.64. For the entire 2024 fiscal year, earnings per share are anticipated to be between $6.10 and $6.17, despite a negative impact from inventory-related expenses. Concluding, Rentler emphasized the company's confidence in its long-term growth opportunities through outstanding value-for-money offerings. She also welcomed Jim Conroy, who will assume the CEO position in early February 2025, amidst the upcoming leadership transitions.