Dublin, Calif. – Ross Stores blamed execution misses for its slack performance during the third quarter.
Hurricanes Helene and Milton, along with unseasonably warm temperatures, also weighed on sales, said outgoing CEO Barbara Rentler, who will step down in early February. But at the end of the day, the team didn’t move as quickly as it should have on merchandising opportunities in some categories, she said.
Sales for quarter ended Nov. 2 rose 3% to $5.1 billion, with comp up 1%. Similar to the second quarter, comp gains at the dd’s Discounts chain outpaced those at Ross Dress for Less stores.
The top performing categories during the quarter were cosmetics, accessories and children’s. Company executives did not mention the home business during their Q3 call with investors yesterday evening.
“Despite the below-plan sales results, earnings were ahead of our expectations,” said Rentler. “Operating margin for the quarter was 11.9%, up from 11.2% last year, as lower incentive, freight, and distribution costs more than offset the planned decline in merchandise margin.”
At the end of the quarter, packaway merchandise represented 38% of total inventory vs. 39% last year.
The company completed its annual store opening schedule during Q3. Following a few relocations and store closings in Q4, it expects to end the year with 1,831 Ross Stores and 354 dd’s locations.
Based on year-to-date results and Ross’ fourth quarter forecast, earnings per share for the 52 weeks ending Feb. 1, 2025 are now expected to be in the range of $6.10 to $6.17 versus $5.56 last year. Both the 2023 fourth quarter and full year results include an approximate $0.20 earnings per share benefit from the 53rd week of this year’s retail calendar.
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