Ross Stores Inc. reported flat same-store sales in the first quarter ended May 4 due to a slow start to spring selling. The off-pricer predicted a slight decline in second-quarter earnings and also withdrew its guidance for the full year due to margin pressures tied to tariffs on Chinese imports.
Earnings in the quarter were slightly down to $479.2 million, or $1.47 a share, from $488.0 million, or $1.46, a year ago. Sales were up 2.6 percent to $4.98 billion from $4.86 billion.
Jim Conroy, chief executive officer, commented, “Despite the slower start to the spring selling season in February, our monthly sales performance improved sharply, month after month, for the balance of the quarter. For the first quarter, sales and earnings performed at the high end of our expectations while operating margin of 12.2 percent was flat year-over-year.”
Update on Shareholder Payouts
During the first quarter of fiscal 2025, a total of 2.0 million shares of common stock were repurchased for an aggregate price of $263 million under the company’s two-year $2.1 billion authorization approved by its Board of Directors in March 2024. The company remains on track to buy back a total of $1.05 billion in common stock during fiscal 2025 and complete the program as planned.
Fiscal 2025 Guidance
Looking ahead, Conroy commented, “Heightened macroeconomic and geopolitical uncertainty persists, most notably prolonged inflation and evolving trade policies. While we directly import only a small portion of our merchandise, more than half of the goods we sell originate from China. As such, we expect pressure on our profitability if tariffs remain at elevated levels. Given the varying nature of tariff announcements, we are only providing an outlook for the second quarter at this time and are withdrawing our previously provided annual sales and earnings guidance.”
Conroy continued, “For the 13 weeks ending August 2, 2025, comparable store sales are now projected to be flat to up 3 percent on top of a 4 percent gain in the second quarter of last year. Earnings per share for the second quarter are now projected to be in the range of $1.40 to $1.55, versus earnings per share of $1.59 for the prior year period ended August 3, 2024. This earnings guidance range includes an approximate $0.11 to $0.16 per share cost impact from announced tariffs.”
Conroy concluded, “The volatility of trade policies and the corresponding impact on the economy, the consumer, and our profitability is highly unpredictable. During these uncertain times, we will focus on what we can control and manage the business conservatively. We have a seasoned executive team, a flexible off-price business model, and a strong financial foundation that should enable us to navigate through this uncertain environment.”
