“Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending. Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan,” Barbara Rentler, chief executive officer, said.
Ross Stores reports earnings of $1.46 per share for Q1 2024, up from $1.09 in Q1 2023, with net earnings of $488 million.
Sales rose 8 per cent to $4.9 billion, with comparable sales up 3 per cent.
Despite economic challenges, operating margin improved to 12.2 per cent.
The company repurchased $262 million of common stock in the first quarter.
“Operating margin of 12.2 per cent rose 205 basis points compared to 10.1 per cent in last year’s first quarter. This improvement was primarily driven by lower distribution, incentive, and freight costs that were partially offset by the planned decline in merchandise margin,” Rentler continued.
During the first quarter of fiscal 2024, a total of 1.9 million shares of common stock were repurchased for an aggregate price of $262 million under the company’s new two-year $2.1 billion authorisation 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 2024.
“Ongoing uncertainty in today’s macroeconomic and geopolitical environments, including prolonged inflation, continue to squeeze our low-to-moderate income customers’ purchasing power. As a result, we believe it is more important than ever to offer our customers the best branded values possible. In addition, we will continue to manage inventory and expenses tightly in order to maximise sales and earnings growth over the balance of the year,” Rentler said
“For the 13 weeks ending August 3, 2024, comparable store sales are projected to increase 2 per cent to 3 per cent on top of a 5 per cent gain in the second quarter of last year. Earnings per share for the second quarter are projected to be in the range of $1.43 to $1.49, up from reported earnings per share of $1.32 for the prior year period ended July 29, 2023,” Rentler continued.
“Based on our first quarter results and forward guidance, comparable store sales for the 52 weeks ending February 1, 2025 remain unchanged at up 2 to 3 per cent, with earnings per share for the 2024 fiscal year now projected to be in the range of $5.79 to $5.98 versus $5.56 for the 53 weeks ended February 3, 2024. As a reminder, fiscal 2023 earnings per share included a benefit of approximately $0.20 from the 53rd week,” Rentler added.
Fibre2Fashion News Desk (RR)