On May 23, 2024, Ross Stores Inc (ROST, Financial) released its 8-K filing for the first quarter of fiscal 2024, reporting earnings per share (EPS) of $1.46, surpassing the analyst estimate of $1.34. The company achieved net earnings of $488 million, up from $371 million in the same period last year. Sales for the quarter increased by 8% to $4.9 billion, compared to $4.5 billion in the prior year period, with comparable sales rising by 3%.
Company Overview
Ross Stores Inc (ROST, Financial) operates as an off-price apparel and accessories retailer, primarily through its Ross Dress for Less banner. The company procures excess brand-name merchandise at significant discounts, creating a treasure hunt shopping experience for its customers. With over 1,750 Ross Dress for Less stores and nearly 350 DD's Discounts chains, Ross Stores serves middle-income and lower-income consumers across densely populated suburban communities.
Performance and Challenges
Despite macroeconomic headwinds that pressured customers' discretionary spending, Ross Stores Inc (ROST, Financial) managed to deliver better-than-expected earnings results. CEO Barbara Rentler commented, "Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending. Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan."
Financial Achievements
Ross Stores Inc (ROST, Financial) reported an operating margin of 12.2%, an improvement of 205 basis points compared to 10.1% in the previous year's first quarter. This improvement was driven by lower distribution, incentive, and freight costs, partially offset by a planned decline in merchandise margin. The company repurchased 1.9 million shares of common stock for $262 million under its new two-year $2.1 billion authorization.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Sales | $4,858,067 | $4,494,686 |
| Net Earnings | $487,990 | $371,191 |
| EPS (Diluted) | $1.46 | $1.09 |
| Operating Margin | 12.2% | 10.1% |
Income Statement Highlights
Ross Stores Inc (ROST, Financial) reported total costs and expenses of $4.22 billion, up from $4.01 billion in the prior year period. The cost of goods sold increased to $3.49 billion from $3.29 billion, while selling, general, and administrative expenses rose to $776 million from $746 million. The company also reported net interest income of $45.95 million, up from $31.40 million in the previous year.
Balance Sheet and Cash Flow
As of May 4, 2024, Ross Stores Inc (ROST, Financial) reported total assets of $14.49 billion, up from $13.62 billion in the prior year. The company's cash and cash equivalents stood at $4.65 billion, with merchandise inventory valued at $2.46 billion. Total liabilities were $9.54 billion, including $1.51 billion in long-term debt. The company generated $368.92 million in net cash from operating activities, down from $413.15 million in the previous year.
Outlook and Guidance
Looking ahead, Ross Stores Inc (ROST, Financial) projects comparable store sales to increase by 2% to 3% for the second quarter of fiscal 2024, with EPS expected to be in the range of $1.43 to $1.49. For the full fiscal year, the company anticipates EPS to be between $5.79 and $5.98, compared to $5.56 in fiscal 2023.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Ross Stores Inc for further details.
