Q2 2025 Ross Stores Inc Earnings Call Transcript
Key Points
- Ross Stores Inc (ROST) reported a sequential improvement in sales trends, with positive changes in nearly all major merchandise categories and most regions.
- Total sales for the second quarter grew 5% to $5.5 billion, with comparable store sales up 2%.
- The company opened 28 new Ross and three dd's DISCOUNTS locations, including entries into new markets like Puerto Rico and the New York metro area.
- Ross Stores Inc (ROST) successfully mitigated some of the tariff impacts through vendor negotiations, diversifying sourcing, and increasing closeout merchandise.
- The cosmetics category performed exceptionally well, and the ladies' business showed significant improvement, comping better than the chain average.
- Operating margin decreased by 95 basis points to 11.5%, primarily due to tariff-related costs.
- Earnings per share for the second quarter were $1.56, slightly down from $1.59 in the same period last year.
- Tariff-related costs negatively impacted earnings by approximately $0.11 per share in the second quarter.
- The company anticipates continued pressure from tariffs in the third quarter, with a modest impact expected to persist into the fourth quarter.
- SG&A expenses deleveraged by 25 basis points, partly due to CEO transition costs.
Good afternoon, and welcome to the Ross Stores second quarter 2025 earnings release conference call. The call will begin with 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 in the company's fiscal 2024 Form 10-K, and fiscal 2025, Form 10-Q, and 8-K 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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