Ross Stores Inc
Q2 2025 Earnings
Includes an approximate $0.11 per share negative impact from tariff-related costs
Market Reaction
S&P 500 over the same 30 days: +2.45%.
Did ROST Beat Earnings? Q2 2025 Results
Ross Stores delivered a modest earnings beat in its fiscal second quarter, posting GAAP diluted EPS of $1.56 against a consensus estimate of $1.54, a 1.41% beat, even as revenue of $5.53 billion came in just shy of the $5.54 billion Wall Street expected, rising 4.6% year over year. The headline figures carried a notable headwind: tariff-related costs weighed on results by approximately $0.11 per share, contributing to a 95-basis-point contraction in operating margin to 11.5% and pushing net income down to $508 million from $527.15 million a year ago. The beat relative to expectations was itself partly a tariff story, as costs came in lower than the company had anticipated. Sales momentum was uneven within the quarter, with strong May results fading in June before a sharp July rebound fueled by back-to-school demand, a pattern that reinforced management's view that value-seeking consumers will continue turning to off-price retail as broader retail prices rise. Looking ahead, Ross guided full-year fiscal 2025 GAAP EPS to $6.08 to $6.21, incorporating roughly $0.22 to $0.25 per share in trade policy costs, with comparable store sales growth of 2% to 3% targeted for each of the next two quarters.
- Comparable store sales up 2% in Q2 2025
- Total sales increased 5% year-over-year to $5.5 billion
- Strong May sales, softened in June, sharp rebound in July
- Operating margin declined 95 basis points to 11.5% due to tariff-related costs
- Tariff-related costs had approximately $0.11 per share negative impact in Q2
- Earnings modestly exceeded the high end of guidance due to lower-than-expected tariff costs
- Store count grew to 2,233 from 2,148 year-over-year
“We are encouraged by the sequential improvement in sales trends relative to the first quarter. During the second quarter, sales in May were strong and softened in June, before rebounding sharply in July. We were pleased to see the improved trend at the end of the quarter, particularly with the early sales performance related to the back-to-school selling season. We ended the period with second quarter sales in line with our expectations, while earnings modestly exceeded the high end of our guidance range, mainly due to lower-than-expected tariff-related costs. Operating margin for the quarter decreased 95 basis points to 11.5% compared to the prior year, primarily reflecting tariff-related costs.”
Ross Stores CEO, on the earnings call
Forward Guidance & Outlook
Ross Stores is planning comparable store sales growth of 2% to 3% for both Q3 and Q4 fiscal 2025. Q3 EPS is projected at $1.31 to $1.37 (vs. $1.48 last year), including $0.07 to $0.08 per share tariff impact. Q4 EPS is projected at $1.74 to $1.81 (vs. $1.79 last year), including $0.04 to $0.06 per share tariff impact. Full-year fiscal 2025 EPS is now planned at $6.08 to $6.21 (vs. $6.32 last year), incorporating approximately $0.22 to $0.25 per share impact from announced trade policies. Management noted that last year's Q4 and full-year results included a one-time ~$0.14 per share benefit from the sale of a packaway facility. The company expects macroeconomic and geopolitical uncertainty to persist and anticipates retail pricing to move higher, which management believes will drive consumers toward off-price value.
ROST YoY Financials
Figures from SEC filings and company reports. Not investment advice.