Ross Stores (ROST) Q3 2025 earnings summary

Executive summary

• Q3 2024 sales rose to $5.1 billion from $4.9 billion, with comparable store sales up 1% and net income up 9% to $489 million; EPS increased to $1.48 from $1.33.

• For the nine months ended November 2, 2024, sales reached $15.2 billion, with net income of $1.5 billion and nine-month EPS of $4.53, up from $3.74.

• Sales growth slowed in Q3 due to high costs for low- to moderate-income customers and weather disruptions, but earnings exceeded expectations on cost controls.

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

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

Financial highlights

• Gross margin improved as cost of goods sold fell to 71.7% of sales from 72.4% year-over-year; operating margin for Q3 was 12.7%, up from 12.0%.

• Q3 net income was $489 million, up from $447 million last year; diluted EPS was $1.48 versus $1.33.

• 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.

• Cash and cash equivalents at period end were $4.35 billion.

Outlook and guidance

• Q4 comparable store sales projected to rise 2%-3%; Q4 EPS guidance is $1.57-$1.64, down from $1.82 last year due to packaway expense timing and absence of last year's extra week.

• Full-year EPS expected in the range of $6.10-$6.17, up from $5.56 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.

• Company expects lower distribution, freight, and incentive compensation costs as a percentage of sales, partially offset by lower merchandise margins.