Ross Stores Reports 3% Sales Growth to $5.07 Billion in Third Quarter 2024

Ross Stores, Inc. reported a solid financial performance for the third quarter and the first nine months of fiscal 2024, with total sales reaching $5.07 billion for the three months ended November 2, 2024, a 3.0% increase from $4.92 billion in the same period last year. For the nine-month period, sales rose to $15.22 billion, up 6.0% from $14.35 billion in the prior year. The company's net earnings for the third quarter were $488.8 million, translating to diluted earnings per share of $1.48, compared to $447.3 million and $1.33 per share in the same quarter of the previous year. Year-to-date net earnings also increased significantly to $1.50 billion, or $4.53 per diluted share, from $1.26 billion, or $3.74 per diluted share, in the prior year.

The company experienced notable changes in its cost structure, with the cost of goods sold as a percentage of sales decreasing to 71.7% for the third quarter, down from 72.4% a year earlier. This reduction was attributed to lower buying costs, distribution costs, and domestic freight costs, which were partially offset by a decrease in merchandise margin. Selling, general, and administrative expenses also saw a slight decrease as a percentage of sales, reflecting improved operational efficiency. The overall effective tax rate for the quarter was approximately 24%, a slight decrease from 25% in the previous year.

Strategically, Ross Stores opened 47 new stores in the third quarter, bringing the total to 1,836 locations across the U.S. and Guam. The company also operates 356 dd’s DISCOUNTS stores, marking a total of 2,192 stores as of November 2, 2024. The expansion is part of Ross's long-term strategy to penetrate new markets and enhance its store footprint. The company continues to focus on delivering value to its customers, particularly in light of ongoing economic pressures affecting discretionary spending among its low-to-moderate income customer base.

Operationally, Ross Stores reported a 1% increase in comparable store sales for the third quarter and a 3% increase for the nine-month period. The company’s inventory management remains a priority, with packaway inventory representing 38% of total inventory, down from 40% at the end of fiscal 2023. The company anticipates continued growth in market share through effective merchandising initiatives and strategic store openings.

Looking ahead, Ross Stores remains optimistic about its growth trajectory, despite the challenges posed by inflation and changing consumer behavior. The company plans to continue its focus on cost management and operational efficiency while investing in new store openings and enhancing its supply chain capabilities. The recent appointment of James G. Conroy as the new CEO, effective February 2, 2025, is expected to bring fresh leadership to the company as it navigates the evolving retail landscape.