Companies /Consumer Cyclical

Ross Stores Inc

NASDAQ: ROST Apparel Retail
$234.10
▲ $0.70 (+0.30%) today
Markets closed · 6:14am ET

Q3 2024 Earnings

Reported Nov 21, 2024, 4:04pm ET · SEC source
$1.48
Beat +5.99%
EPS · est. $1.40 GAAP
$5.1B
Miss −1.46%
Revenue · est. $5.1B
+4.4%
Beating market
ROST vs S&P since report
8 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−6%−3%0Nov 21Nov 22report 4:04pm ETearnings+0.5%−3.5%
−6%−3%0Nov 21Nov 22earnings+0.5%−3.5%
ROST −3.5%S&P 500 +0.5%
−6%−3%0Nov 21Nov 22report 4:04pm ETearnings+0.3%−3.5%
−6%−3%0Nov 21Nov 22earnings+0.3%−3.5%
ROST −3.5%NASDAQ +0.3%
−8%−4%0Nov 20Nov 29report 4:04pm ETearnings+1.6%+0.4%
−8%−4%0Nov 20Nov 29earnings+1.6%+0.4%
ROST +0.4%S&P 500 +1.6%
−8%−4%0Nov 20Nov 29report 4:04pm ETearnings+1.1%+0.4%
−8%−4%0Nov 20Nov 29earnings+1.1%+0.4%
ROST +0.4%NASDAQ +1.1%
+2.19%
Day of report
+4.93%
Next session
+7.03%
One week
+5.33%
30 days

S&P 500 over the same 30 days: +0.98%.

Did ROST Beat Earnings? Q3 2024 Results

Ross Stores delivered a tale of two metrics in its fiscal third quarter of 2024, posting a meaningful profit beat alongside a modest revenue shortfall that together captured the paradox facing off-price retail right now. GAAP diluted EPS of $1.48 topped the $1.40 consensus by roughly 6%, driven by operating margin expansion to 11.9% from 11.2% a year ago as lower freight costs, reduced distribution expenses, and lighter incentive costs more than offset a planned decline in merchandise margin. Revenue of $5.07 billion, up 3.0% year-over-year, came in 1.46% below expectations, and comparable store sales rose just 1%, a sharp deceleration CEO Barbara Rentler attributed to weather disruptions from Hurricanes Helene and Milton, unseasonably warm temperatures, and the pressure that elevated costs on necessities are placing on the company's core low-to-moderate income shoppers. Despite the sales disappointment, investors responded positively, with shares rising sharply following the report. Looking ahead, management guided Q4 GAAP EPS of $1.57 to $1.64 on comparable sales growth of 2% to 3%, putting full-year fiscal 2024 EPS guidance at $6.10 to $6.17.

Key Takeaways
  • Operating margin expanded to 11.9% from 11.2% year-over-year
  • Lower incentive, freight, and distribution costs drove margin improvement
  • Planned decline in merchandise margin partially offset cost savings
  • Comparable store sales gained 1% in Q3
  • Net store count increased by 80 stores year-over-year to 2,192

“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.”

Ross Stores CEO, on the earnings call

Forward Guidance & Outlook

For Q4 fiscal 2024 (13 weeks ending February 1, 2025), Ross Stores projects comparable store sales growth of 2% to 3% and EPS of $1.57 to $1.64. This guidance includes an unfavorable impact of approximately $0.03 per share from the timing of packaway-related expenses that benefited Q3. Full-year fiscal 2024 EPS is now expected in the range of $6.10 to $6.17 versus $5.56 last year. The prior-year Q4 and full-year results included an approximate $0.20 EPS benefit from the 53rd week.

ROST YoY Financials

Q3 2024 vs Q3 2023 · SEC filings Q3 2023 Q3 2024
$0$2.0B$4.0B$4.9B$5.1BRevenue$1.4B$1.4BGross Profit$550.1M$604.2MOperating Income$447.3M$488.8MNet Income
$0$2.0B$4.0BRevenueGross ProfitOperating IncomeNet Income

Figures from SEC filings and company reports. Not investment advice.