Ross Stores Reports 2.6% Revenue Increase to $4.98 Billion in Q1 Fiscal 2025

Ross Stores, Inc. reported a revenue increase of 2.6% for the first quarter of fiscal 2025, with sales reaching $4.98 billion compared to $4.86 billion in the same period last year. The company's operating income remained stable at $606.5 million, reflecting an operating margin of 12.2%. However, net earnings decreased slightly to $479.2 million, down from $488.0 million in the prior year, resulting in diluted earnings per share of $1.47, a marginal increase from $1.46 in the previous year.

The company's cost of goods sold rose to $3.58 billion, representing 71.8% of sales, which is consistent with the previous year's percentage. Selling, general, and administrative expenses also increased to $797.1 million, accounting for 16.0% of sales, up from 15.9% in the prior year. The increase in expenses was primarily attributed to the opening of 78 net new stores over the past year, which included 19 new stores opened in the first quarter of fiscal 2025. The company plans to open approximately 90 new stores throughout the fiscal year.

In terms of operational metrics, Ross Stores operated 1,847 Ross Dress for Less locations and 358 dd’s DISCOUNTS stores as of May 3, 2025. The company’s total store count increased to 2,205, up from 2,127 a year earlier. The sales mix remained consistent across various categories, with home accents and bed and bath accounting for 26% of sales, followed by ladies' apparel at 23%. The company continues to focus on maintaining a pricing advantage over traditional retailers, despite ongoing inflationary pressures and geopolitical uncertainties.

The financial outlook for Ross Stores indicates a cautious approach as the company navigates potential challenges from tariffs and inflation. The management anticipates that merchandise margins may decrease due to these factors, particularly with the opening of a new distribution center in Buckeye, Arizona, which is expected to increase distribution costs. Despite these challenges, the company remains committed to its strategy of providing quality branded merchandise at competitive prices, aiming to capture market share in a challenging retail environment.