Ross Stores' Q1 Earnings Surge, Exceeding Expectations

2 min read | May 28, 2024 03:11 PM PDT | By Team Kalkine Media

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Ross Stores' Q1 Earnings Surge, Exceeding Expectations — Image source: © Vladwel | Megapixl.com

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Ross Stores, Inc. (NASDAQ: ROST) announced impressive first-quarter results for the 13 weeks ending May 4, 2024, showcasing significant growth in earnings and sales. The company reported earnings per share (EPS) of $1.46 on net earnings of $488 million. This marks a notable increase from the previous year’s EPS of $1.09 on net income of $371 million for the same period.

Solid Sales Growth

The first quarter of 2024 saw Ross Stores achieve an 8% increase in sales, reaching $4.9 billion compared to $4.5 billion in the first quarter of 2023. Comparable sales also rose by 3% year-over-year, reflecting the company's resilience in a challenging economic environment.

Operating Margin Improvement

Operating margin for the first quarter increased significantly to 12.2%, up 205 basis points from 10.1% in the same quarter last year.

Stock Repurchase Program

During the first quarter, Ross Stores repurchased 1.9 million shares of common stock at an aggregate price of $262 million. This repurchase is part of the company’s two-year, $2.1 billion stock buyback program authorized by the Board of Directors in March 2024. The company plans to repurchase a total of $1.05 billion in common stock during fiscal 2024.

Future Guidance

Looking ahead, Rentler highlighted ongoing challenges in the macroeconomic and geopolitical environments, including prolonged inflation that continues to affect low-to-moderate income customers' purchasing power. To address these challenges, Ross Stores aims to offer the best branded values possible while tightly managing inventory and expenses to maximize sales and earnings growth.

For the second quarter ending August 3, 2024, the company projects comparable store sales to increase by 2% to 3%, building on a 5% gain in the same quarter last year. EPS for the second quarter is expected to be between $1.43 and $1.49, up from $1.32 in the prior year period.

For the full fiscal year ending February 1, 2025, Ross Stores maintains its projection of a 2% to 3% increase in comparable store sales. EPS for fiscal 2024 is now projected to be between $5.79 and $5.98, compared to $5.56 for fiscal 2023, which included a $0.20 benefit from an additional week.

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