Ross Stores, Inc. reported total sales for the 2024 second quarter increased 7 percent to $5.3 billion, up from $4.9 billion for the comparable period in 2023. Comparable (comp) store sales were up 4 percent year-over-year.
Sales for the six-month year-to-date period ended August 4 grew to $10.1 billion, up from $9.4 billion in the prior year. Comparable store sales for the first half of 2024 were up 3 percent year-over-year.
Operating margin increased 115 basis points year-over-year to 12.5 percent of sales in Q2.
Barbara Rentler, CEO of Ross Stores, Inc., said the company’s improved profitability relative to last year benefited from higher sales and lower distribution and incentive costs, partially offset, as expected, by lower merchandise margins.
“Second quarter sales and earnings were above our expectations as our stronger value offerings resonated with our customers,” Rentler noted.
The discount retailer reported net income of $527 million, or $1.59 per share, in the second quarter, compared to a net income of $446 million, or $1.32 per share, in the 2023 Q2 period.
Stock Buy-Back
During the second quarter of fiscal 2024, 1.8 million shares of common stock were repurchased for an aggregate price of $262 million. As a result, the company remains on track to buy back $1.05 billion in common stock during fiscal 2024 under the two-year $2.1 billion authorization approved by its Board of Directors in March 2024.
Second Half and Updated Fiscal 2024 Guidance
Looking ahead, Rentler commented, “Our low-to-moderate income customers continue to face persistently high costs on necessities, pressuring their discretionary spending. In addition, our prior year sales comparisons become more challenging during the second half of the year amidst an external environment that is uncertain and volatile. As such, we continue to maintain a cautious approach to forecasting our sales.”
For the third and fourth quarters, ROST plans comparable sales growth of 2 percent to 3 percent on top of 5 percent and 7 percent gains, respectively, in 2023.
“If the second half of 2024 performs in line with these sales projections, earnings per share for the third quarter are projected to be $1.35 to $1.41 versus $1.33 last year and $1.60 to $1.67 for the fourth quarter, compared to $1.82 in 2023. This updated earnings guidance now reflects additional efficiencies we expect to achieve in the second half of 2024,” Rentler said.
“Based on our first half results and second half guidance, earnings per share for the 52 weeks ending February 1, 2025, are now planned to be in the range of $6.00 to $6.13 versus $5.56 last year,” Rentler added. “As a reminder, both the 2023 fourth quarter and full year results included an approximate $0.20 earnings per share benefit from the 53rd week.”
Image courtesy Ross Stores, Inc.
