Q3 2025 Ross Stores Inc Earnings Call Transcript
Key Points
- Ross Stores Inc (ROST) reported a 10% increase in total sales to $5.6 billion, with comparable store sales rising by 7%.
- The company achieved an operating margin of 11.6%, which was stronger than expected.
- Ross Stores Inc (ROST) successfully opened 36 new Ross and four dd's DISCOUNTS stores in the third quarter, completing their 2025 expansion program.
- The company's branded strategy has been fully embedded, leading to improved vendor partnerships and increased closeout opportunities.
- Ross Stores Inc (ROST) raised its fourth-quarter comparable store sales forecast to 3% to 4% and increased its earnings per share guidance for fiscal 2025.
- The operating margin decreased by 35 basis points due to the impact of tariffs.
- Distribution costs increased by 60 basis points, primarily due to the opening of a new distribution center and tariff-related processing costs.
- Merchandise margin deleveraged by 10 basis points, and cost of goods sold increased by 35 basis points.
- The company faced a $0.05 per share negative impact from tariff-related costs in the third quarter.
- Despite improvements, the home merchandise category performed slightly below the chain average.
Good afternoon and welcome to the Ross Stores third 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 Forms 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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