Ross Stores (ROST) Q3 2025 earnings summary

Executive summary

• Q3 2024 sales rose to $5.1 billion, up 3% year-over-year, with comparable store sales up 1% and net income increasing to $489 million.

• EPS for Q3 was $1.48, up from $1.33 last year; nine-month EPS was $4.53 on net income of $1.5 billion.

• Sales growth slowed in Q3 due to weather and merchandising execution issues, impacting discretionary spending.

• 89 new stores opened year-to-date, bringing the total to 2,192 locations.

• CEO transition announced: James G. Conroy to become CEO in February 2025, with Barbara Rentler moving to an advisory role.

Financial highlights

• Operating margin for Q3 improved to 11.9% from 11.2% year-over-year; gross margin rose as cost of goods sold fell to 71.7% of sales.

• SG&A expenses as a percentage of sales decreased to 16.4% from 16.5% year-over-year.

• Net cash provided by operating activities for nine months was $1.47 billion.

• $787.5 million spent on share repurchases and $367.5 million paid in dividends year-to-date.

• Strongest merchandise areas in Q3 were cosmetics, accessories, and children; best-performing regions were California and Texas.

Outlook and guidance

• Q4 comparable store sales projected to increase 2%-3%; EPS guidance for Q4 is $1.57-$1.64, down from $1.82 last year due to packaway expense timing.

• Full-year EPS expected in the range of $6.10-$6.17, up from $5.56 last year, noting last year included an extra week that benefited EPS by $0.20.

• Operating margin for Q4 expected between 11.2%-11.5%, compared to 12.4% last year.

• Fiscal 2024 capital expenditures projected at $760 million, focused on new stores, distribution centers, and IT investments.

• Sufficient liquidity projected to fund operations, investments, debt repayments, and shareholder returns for at least the next 12 months.