Ross Stores, Inc. reported its financial results for the second quarter and first half of fiscal 2025, revealing a sales increase of 5% to $5.53 billion for the three months ended August 2, 2025, compared to $5.29 billion for the same period last year. For the six-month period, sales rose by 4% to $10.51 billion from $10.15 billion. However, net earnings for the second quarter decreased to $508 million, or $1.56 per diluted share, down from $527 million, or $1.59 per diluted share, in the prior year. For the first half, net earnings also fell to $987 million, or $3.03 per diluted share, compared to $1.02 billion, or $3.05 per diluted share, in the same period last year.
The company's cost of goods sold (COGS) increased, accounting for 72.4% of sales in the second quarter, up from 71.7% a year earlier. This rise was attributed to higher distribution costs and tariff-related expenses, which negatively impacted merchandise margins. Selling, general, and administrative expenses also increased, reflecting higher store-related costs and expenses associated with the transition of the Chief Executive Officer. Operating income as a percentage of sales decreased to 11.5% from 12.5% in the prior year, indicating a decline in profitability.
Operationally, Ross Stores opened 31 new stores in the second quarter, bringing the total to 1,873 locations across 44 states, the District of Columbia, Guam, and Puerto Rico. The company also operates 360 dd’s DISCOUNTS stores in 22 states. The expansion strategy is focused on market penetration and demographic analysis, with plans to open approximately 90 new stores in fiscal 2025. Comparable store sales grew by 2% in the second quarter, driven by a 1% increase in both transaction volume and average basket size.
Looking ahead, Ross Stores anticipates continued challenges from macroeconomic factors such as inflation and tariffs, which may affect operating margins. The company remains committed to its off-price retail model, aiming to provide value to customers while navigating these pressures. The management expressed confidence in their ability to capture market share and adapt to changing market conditions. The company has also declared a quarterly cash dividend of $0.405 per share, reflecting its ongoing commitment to returning value to shareholders.
About ROSS STORES, INC.
Ross Stores, Inc. operates two off-price retail brands, Ross Dress for Less and dd’s DISCOUNTS, offering first-quality, name-brand apparel, accessories, footwear, and home goods at significant discounts. Serving primarily middle- and lower-income consumers across the U.S., the company focuses on value, wide product assortments, and organized store environments. Its business model emphasizes opportunistic purchasing, low operating costs, and strategic store locations to deliver competitive prices and convenience.
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