Q1 2025 Ross Stores Inc Earnings Call Transcript
Key Points
- Total sales grew 3% to $5 billion, with earnings per share slightly increasing to $1.47 from $1.46 last year.
- Cosmetics was the strongest merchandise area, and the Southeast region performed the best geographically.
- The dd's DISCOUNT brand continued its strong momentum with solid sales and operating profits.
- Ross Stores Inc (ROST) opened 16 new Ross and 3 dd's DISCOUNT locations in the first quarter, with plans for approximately 90 new stores this year.
- The company repurchased 2 million shares of common stock for $263 million, remaining on track to buy back a total of $1.05 billion in stock during 2025.
- Comparable store sales were flat for the quarter, indicating no growth in same-store sales.
- Merchandise margin declined by 45 basis points due to higher ocean freight costs and the initial impact of tariffs.
- Operating margin of 12.2% was flat year over year, showing no improvement in profitability.
- The company faces potential short-term pressure on profitability due to elevated tariff levels on goods originating from China.
- Ross Stores Inc (ROST) withdrew its previously provided annual guidance due to too many unknown variables affecting visibility into the second half of the fiscal year.
Good afternoon and welcome to the Ross Stores' first-quarter 2025 earnings release conference call. The call will begin the prepared comments by management followed by a question-and-answer session. (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 2024 Form 10-K and fiscal 2025 Form 8-Ks on file with the SEC.
And now I'd like to turn the call over to Jim Conroy, Chief Executive Officer.
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