Ross Stores(ROST) - 2026 Q2 - Quarterly Results

Ross Stores, Inc. Second Quarter 2025 Earnings Release Second Quarter and First Half 2025 Financial Performance Ross Stores saw Q2 sales rise 5% to $5.5 billion with 2% comparable store sales growth, but EPS declined due to tariffs Second Quarter 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $5.5 billion | $5.3 billion | +5% | | Comparable Store Sales | +2% | N/A | N/A | | Net Income | $508 million | $527 million | -3.6% | | Diluted EPS | $1.56 | $1.59 | -1.9% | - The second quarter earnings included an approximate $0.11 per share negative impact from tariff-related costs[5] First Half 2025 Financial Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $10.5 billion | $10.1 billion | +4.0% | | Comparable Store Sales | +1% | N/A | N/A | | Net Income | $987 million | $1.0 billion | -1.3% | | Diluted EPS | $3.03 | $3.05 | -0.7% | Management Commentary and Business Outlook Management noted improving sales trends, Q2 earnings exceeded guidance due to lower tariffs, but operating margin declined to 11.5% - Sales trends improved sequentially from Q1, with strong performance in May, a softening in June, and a sharp rebound in July, boosted by early back-to-school sales[7] - Q2 earnings modestly exceeded guidance, mainly because tariff-related costs were lower than expected[7] - Operating margin for Q2 decreased by 95 basis points to 11.5% year-over-year, primarily due to the impact of tariff-related costs[7] - The company anticipates that persistent macroeconomic uncertainty and rising retail prices will lead consumers to seek more value, positioning Ross Stores to potentially capture market share by focusing on its value proposition[9] Shareholder Payouts Ross Stores repurchased $262 million in shares in Q2 2025, targeting $1.05 billion in fiscal 2025 buybacks - In Q2 2025, the company repurchased 1.9 million shares for an aggregate price of $262 million[8] - The company remains on track to buy back a total of $1.05 billion in common stock during fiscal 2025, as part of a two-year, $2.1 billion program approved in March 2024[8] Fiscal 2025 Guidance Ross Stores forecasts full-year EPS of $6.08-$6.21, including a $0.22-$0.25 negative tariff impact, with 2-3% comparable store sales growth for Q3/Q4 Fiscal 2025 Guidance Summary | Period | Comparable Store Sales Growth | Diluted EPS Range | Prior Year EPS | | :--- | :--- | :--- | :--- | | Q3 2025 | +2% to +3% | $1.31 to $1.37 | $1.48 | | Q4 2025 | +2% to +3% | $1.74 to $1.81 | $1.79 | | Full Year 2025 | N/A | $6.08 to $6.21 | $6.32 | - The guidance includes an estimated negative impact from tariffs of $0.07 to $0.08 per share in Q3 and $0.04 to $0.06 per share in Q4[9] - For the full fiscal year 2025, the total anticipated negative impact from announced trade policies is approximately $0.22 to $0.25 per share[9] - The company noted that fiscal 2024 results included a one-time benefit of approximately $0.14 per share from the sale of a packaway facility, which affects the year-over-year comparison[9] Financial Statements Financial statements show slight Q2/H1 net earnings declines, decreased total assets/cash, and a net cash decrease from debt repayment Condensed Consolidated Statements of Earnings Q2 2025 sales rose to $5.53 billion, but operating income fell to $638.3 million, and net earnings decreased to $508.0 million Condensed Consolidated Statements of Earnings (Three Months Ended) | ($ in thousands) | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | | :--- | :--- | :--- | | Sales | $5,529,152 | $5,287,519 | | Operating income | $638,274 | $659,233 | | Net earnings | $507,995 | $527,148 | | Diluted EPS | $1.56 | $1.59 | Condensed Consolidated Balance Sheets As of August 2, 2025, total assets decreased to $14.50 billion, cash to $3.85 billion, while stockholders' equity grew to $5.73 billion Condensed Consolidated Balance Sheets (As of) | ($ in thousands) | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $3,847,016 | $4,668,137 | | Merchandise inventory | $2,608,485 | $2,490,558 | | Total assets | $14,495,519 | $14,678,021 | | Total current liabilities | $4,392,008 | $4,874,240 | | Total liabilities | $8,762,950 | $9,547,489 | | Stockholders' Equity | $5,732,569 | $5,130,532 | Condensed Consolidated Statements of Cash Flows H1 2025 net cash from operations increased to $1.08 billion, but financing activities used $1.55 billion due to debt repayment, resulting in an $883 million net cash decrease Condensed Consolidated Statements of Cash Flows (Six Months Ended) | ($ in thousands) | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,078,077 | $961,042 | | Net cash used in investing activities | ($409,105) | ($333,735) | | Net cash used in financing activities | ($1,552,141) | ($830,040) | | Net decrease in cash | ($883,169) | ($202,733) |