Q3 2024 Ross Stores Inc Earnings Call Transcript
Key Points
- Ross Stores Inc (ROST) reported earnings per share of $1.48 for the third quarter, up from $1.33 last year, exceeding expectations.
- Operating margin improved by 75 basis points to 11.9%, driven by lower incentive freight and distribution costs.
- Total sales increased to $5.1 billion from $4.9 billion in the previous year, with comparable store sales up 1%.
- The company completed its 2024 expansion program, adding 43 new Ross and four dd's DISCOUNTS stores, totaling 89 new locations for the year.
- dd's DISCOUNTS outperformed Ross Stores, with strong value and fashion offerings resonating well with shoppers.
- Third-quarter sales results were disappointing, with business slowing compared to the first half of 2024.
- Persistent high costs on necessities pressured discretionary spending among low to moderate income customers.
- Severe weather, including hurricanes and unseasonably warm temperatures, negatively impacted comparable store sales by about 1%.
- Merchandise margin decreased by 60 basis points, despite improvements in other cost areas.
- Fourth-quarter earnings per share are projected to decline compared to the previous year, with a range of $1.57 to $1.64 versus $1.82 last year.
Good afternoon, and welcome to the Ross Stores third-quarter 2024 earnings release conference call. (Operator Instructions)
Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, new store openings, and other matters that are based on the company's current forecast of aspects of its future business.
These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today's press release and the company's fiscal 2023 Form 10-K and fiscal 2024 Form 10-Qs and 8-Ks on file with the SEC.
And now I'd like to turn the call over to Barbara Rentler, Chief Executive Officer.
Good afternoon. Joining me on our call today are
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