Bargain Hunters Rejoice! Ross Stores Q1 Crushes Estimates

Fashnopsis:

• Ross Stores delivered a strong Q1, exceeding earnings expectations.
• The company acknowledges economic challenges but remains confident in its strategy.
• Ross Stores raised its full-year 2024 earnings per share guidance.
• The company prioritizes offering customers the best value and managing expenses efficiently.

Ross Stores delivered positive results for the first quarter of fiscal 2024, exceeding earnings expectations. The leading off-price retailer reported earnings per share of $1.46 on net earnings of $488 million, compared to $1.09 per share on net income of $371 million in the prior-year quarter. Sales grew 8% year-over-year to $4.9 billion, with comparable store sales up 3%.

Financial Highlights

• Earnings per share: $1.46 vs. $1.09 year-over-year
• Net earnings: $488 million vs. $371 million year-over-year
• Sales: $4.9 billion vs. $4.5 billion year-over-year
• Comparable store sales: Up 3% year-over-year

CEO’s Commentary

Barbara Rentler, Chief Executive Officer of Ross Stores, acknowledged that while the company aimed for higher sales, they achieved their guidance despite ongoing economic headwinds impacting customer spending. Lower expenses than anticipated were a significant factor in exceeding earnings expectations. Ross Stores also highlighted a notable improvement in operating margin, driven by reduced distribution, incentive, and freight costs.

Looking Ahead

The company remains optimistic for the rest of the year, projecting comparable store sales growth of 2% to 3% for the second quarter. Earnings per share are expected to fall within a range of $1.43 to $1.49, exceeding the prior-year period’s $1.32. Ross Stores also revised its full-year 2024 guidance, keeping the comparable store sales growth outlook at 2% to 3%. However, earnings per share are now projected to be in the $5.79 to $5.98 range, up from the previously announced $5.56. This upward revision considers the strong Q1 performance and the company’s strategic plan.

Image Source: Ross Stores