Wed, Jun 11, 10:00 AM (38 days ago)
**Ross Stores, Inc. (ROST) Q1 2025 Financial Summary** Ross Stores, Inc. (ROST) reported a mixed quarter with steady revenue growth but faced challenges in maintaining profit margins due to increased costs and economic pressures. Here are the key points: **Revenue and Profit Margins:** - **Revenue:** $4,985 million, up 2.6% from the previous year, driven by the opening of 78 net new stores. - **Profit Margins:** Operating income as a percentage of sales remained flat at 12.2%, but merchandise margins decreased due to higher ocean freight costs and tariffs. **Earnings:** - **Earnings per Share (EPS):** Diluted EPS was $1.47, a slight increase from $1.46 in the previous year, primarily due to a reduction in weighted-average diluted shares outstanding. - **Net Earnings:** $479.2 million, down from $487.9 million in the previous year. **Cash Flow:** - **Operating Cash Flow:** $410 million, up from $369 million, driven by lower incentive compensation payments. - **Investing Activities:** $207 million used in investing activities, up from $136 million, due to higher capital expenditures. - **Financing Activities:** $1.1 billion used in financing activities, primarily due to the repayment of $700 million in Senior Notes and stock repurchases. **Store Performance:** - **Store Openings:** 19 new stores opened in Q1 2025, with plans to open approximately 90 new stores for the year. - **Sales Mix:** Consistent across categories, with no significant shifts in consumer preferences. **Future Outlook:** - **Economic Pressures:** Continued inflation, geopolitical uncertainties, and tariffs pose risks to profitability. - **Strategic Initiatives:** Focus on maintaining a pricing umbrella below traditional retailers and leveraging the flexible off-price business model to navigate uncertainties. - **Capital Expenditures:** Projected at $855 million for fiscal 2025, funded by available cash and the $1.3 billion revolving credit facility. **Uncertainties and Risks:** - **Tariffs and Trade Policies:** Elevated tariffs and trade restrictions could disrupt supply chains and increase costs. - **Consumer Spending:** Economic conditions and consumer confidence may affect spending habits and demand for merchandise. - **Operational Challenges:** Managing inventory, markdowns, and supply chain disruptions are critical to maintaining profitability. Ross Stores, Inc. remains focused on delivering value to customers while navigating economic and operational challenges. The company's strategic initiatives and financial position provide a solid foundation for continued growth and market share expansion.