Home Ross Rides Value Wave to Q3 Wall Street Beat
November 17, 2023

Ross Rides Value Wave to Q3 Wall Street Beat

Posted In: Retail Articles

By Mike Duff

Contributing Editor

Value across its namesake and dd’s Discounts stores helped propel Rose Stores to a third-quarter Wall Street beat on sales and earnings.

In the quarter, Ross posted net earnings of $447.3 million, or $1.33 per diluted share, versus $342 million, or $1 per diluted share, in the year-past period.

Ross beat a Zacks Investment Research-published consensus analyst earnings per diluted share estimate of $1.22 as well as a revenue estimate of $4.84 billion.

Comparable sales for the quarter gained 5% year over year. Net sales were $4.92 billion, up from $4.57 billion in the year-previous period, the company noted. 

Barbara Rentler, Ross CEO said in a conference call that home business performance came in slightly below chain average. Otherwise, cosmetics, accessories and shoes delivered the strongest sales performances, while geographic gains were broad-based.

In introducing the financial results, Rentler said, “We are pleased that both sales and earnings outperformed our expectations for the quarter as customers responded favorably to the terrific values we offered throughout our stores. Operating margin for the period was 11.2%, up from 9.8% last year, as leverage from the same-store sales gain and lower freight costs was partially offset by higher incentives and store wages.”

She added that Ross continues “to face macroeconomic volatility, persistent inflation and more recently, geopolitical uncertainty. In addition, we are up against our most difficult quarterly sales comparisons versus 2022 in the fourth quarter. As a result, we believe it is prudent to maintain a cautious approach in forecasting our business and are reiterating our prior sales guidance for the fourth quarter. Despite the current macroeconomic and geopolitical uncertainties, we remain confident in the resilience of the off-price sector and our ability to operate successfully within it. Our business model offers shoppers both value and convenience, and we believe consumers’ heightened focus on these important factors bodes well for us for the foreseeable future.”

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