Ross Stores Inc. reported fiscal third‑quarter 2025 results that exceeded analyst expectations on both top‑line and bottom‑line metrics. Revenue climbed 10% year‑over‑year to $5.6 billion, driven by robust demand in its core categories—particularly cosmetics, shoes, and women’s apparel—while the company posted earnings per share of $1.58, beating the consensus estimate of $1.42 by $0.16 (about 12%). Comparable store sales grew 7%, and the operating margin held steady at 11.6%, even after a $0.05 per share tariff‑related cost impact was recorded for the quarter.
The revenue beat can be traced to a combination of strong merchandise execution and effective pricing. Ross’s “branded strategy” has secured higher‑margin closeout inventory, while its marketing campaigns have increased foot traffic and conversion rates. The 7% rise in comparable store sales outpaced the 1% growth seen in the same period a year earlier, underscoring the acceleration in consumer demand for value‑oriented products. At the same time, the company managed to keep its cost base in check, with lower domestic freight and occupancy expenses offsetting the tariff impact and supporting the healthy margin profile.
The EPS beat reflects disciplined cost control and operational leverage. While tariff costs added $0.05 per share, the company’s ability to maintain an 11.6% operating margin—only a 35‑basis‑point decline from the 11.9% margin reported in Q3 FY24—demonstrates effective pricing power and scale. The company also completed its 2025 expansion plan, opening 36 new Ross stores and four dd’s DISCOUNTS locations, which contributed to higher sales volumes and helped dilute the impact of the tariff cost. The combination of margin stability and volume growth enabled the earnings beat.
Management raised its fourth‑quarter guidance, projecting comparable store sales growth of 3% to 4% and EPS between $1.77 and $1.85. For the full fiscal year, Ross now expects earnings per share in the range of $6.38 to $6.46, a modest upside to prior guidance that incorporates an estimated $0.16 per share tariff cost for the year. The guidance signals confidence in sustained demand through the holiday season and a continued ability to manage costs while expanding the store footprint.
The quarter also highlighted the strength of Ross’s two banners. Cosmetics, shoes, and women’s apparel were the strongest merchandise areas, while dd’s DISCOUNTS continued to deliver comparable gains, reflecting the appeal of its value‑and‑fashion mix. The opening of 36 new Ross stores and four dd’s DISCOUNTS locations during the quarter added 1,200 new retail sites, reinforcing the company’s growth strategy and providing additional capacity to capture holiday shoppers.
Headwinds remain in the form of tariff‑related costs, but Ross’s management has mitigated these through lower freight and occupancy expenses and by leveraging its closeout inventory strategy. Tailwinds include persistent consumer demand for value, successful marketing initiatives, and the momentum from the recent store expansion. Together, these factors suggest Ross is well positioned to navigate the current economic uncertainty while maintaining profitability.
Jim Conroy, Ross’s CEO, said the quarter “accelerated from the prior period” and that “our merchandise assortment of compelling brand‑name values resonated with shoppers.” He added that the company’s “operating margin of 11.6% was much stronger than expected” and that Ross is “optimistic about the holiday season” thanks to its focus on quality, branded merchandise at exceptional value. Analysts noted the EPS beat and margin expansion as key drivers of the positive reception to the results.
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