Ross Stores(US:ROST)2025-12-09 22:38Sales Performance - Sales for the three-month period ended November 1, 2025, increased by $0.5 billion, or 10%, compared to the same period in 2024, driven by a 7% increase in comparable store sales and a $0.2 billion increase in non-comparable store sales [73]. - Comparable store sales growth for the nine-month period ended November 1, 2025, was 3%, reflecting a 2% increase in basket size and a 1% increase in traffic [74]. - The company opened 40 new stores in the third quarter of fiscal 2025, completing a total of 90 new store openings for the fiscal year [68]. Financial Performance - Operating income as a percentage of sales decreased by 35 basis points for the three-month period and 45 basis points for the nine-month period ended November 1, 2025, primarily due to increased cost of goods sold [81]. - Diluted earnings per share for the three-month period ended November 1, 2025, increased by $0.10, or 7%, to $1.58, attributed to a 5% increase in net earnings and a 2% reduction in weighted-average diluted shares outstanding [87]. - The effective tax rate for the three-month period ended November 1, 2025, was approximately 25%, up from 24% in the same period in 2024, primarily due to tax effects associated with stock-based compensation [85]. Cost Management - Cost of goods sold as a percentage of sales for the three-month period ended November 1, 2025, increased by approximately 35 basis points, mainly due to higher distribution costs and tariff-related processing costs [77]. - Selling, general and administrative expenses increased by $0.1 billion for the three-month period ended November 1, 2025, primarily due to higher store-related costs [79]. Cash Flow and Investments - Net cash provided by operating activities was $1.9 billion for the nine months ended November 1, 2025, compared to $1.5 billion for the same period in the prior year, reflecting a $0.4 billion increase [92][93]. - Cash used in investing activities increased to $0.6 billion for the nine months ended November 1, 2025, from $0.5 billion in the prior year, primarily due to higher capital expenditures related to a new distribution center [96][97]. - Net cash used in financing activities was $2.0 billion for the nine months ended November 1, 2025, up from $1.5 billion in the prior year, mainly due to increased Senior Note repayments [99][100]. Debt and Shareholder Returns - As of November 1, 2025, the company had approximately $1.5 billion of outstanding unsecured Senior Notes, with $499 million classified in current liabilities [102]. - The company repurchased 5.6 million shares of common stock for $787.5 million under its stock repurchase program during the nine months ended November 1, 2025 [103]. - The company declared a quarterly cash dividend of $0.4050 per common share on November 19, 2025, with total cash dividends paid of $397.2 million for the nine months ended November 1, 2025 [104]. Inventory and Capital Expenditures - Packaway inventory represented 36% of total inventory as of November 1, 2025, compared to 38% a year earlier, indicating a strategic management of inventory levels [95]. - Capital expenditures for fiscal 2025 are projected to be approximately $800 million, focusing on new stores and supply chain investments [98]. Liquidity - The company ended the third quarter of fiscal 2025 with $4.1 billion of unrestricted cash balances, indicating strong liquidity [106]. - The company expects existing cash, cash equivalents, and credit facilities to meet operational needs for at least the next 12 months [106].