American apparel retailer Ross Stores, Inc a 4.6 per cent Y-o-Y rise in Q2, FY25 sales to $5.53 billion. However, despite this sales growth, the company’s operating income declined to $638.3 million, and net earnings contracted by 3.6 per cent to $508 million. Diluted earnings per share (EPS) also decreased to $1.56.
In H1, FY25, the company’s sales reached $10.51 billion while operating income totaled $1.24 billion, and net earnings declined to $987.2 million, with diluted EPS at $3.03.
During this period, Ross Stores continued to increase its retail footprint to a total of 2,233 stores, as against 2,148 a year ago.
Jim Conroy, CEO, Ross Stores, notes, sales were strong in May, softened in June, and then rebounded sharply in July, particularly with the start of the back-to-school season. Earnings modestly surpassed their guidance due to lower-than-expected tariff-related costs, even though the operating margin decreased by 95 basis points to 11.5 per cent because of those same costs, he explains.
Looking ahead, the company forecasts a 2 per cent-3 per cent comparable store sales growth in H2, FY2025. It estimates, tariffs will impact results by approximately $0.07-$0.08 per share in Q3 and $0.04-$0.06 in Q4.
For the full fiscal year ending January 31, 2026, the projected EPS is in the range of $6.08-$6.21. Conroy states, the company will remain cautious due to the uncertain macroeconomic environment. He expects, as retail prices rise throughout the year, consumers will increasingly seek value, which could benefit the company.
