Ross Stores Tops Q2 Earnings Estimate, Expects Modest Pressures in Q3

Core Insights - Ross Stores, Inc. reported second-quarter fiscal 2025 results with earnings per share (EPS) of $1.56, exceeding the Zacks Consensus Estimate of $1.52, but a 1.9% decline from $1.59 in the same quarter of fiscal 2024 due to tariff-related costs [2][7] - Total sales reached $5,529 million, a 5% increase year over year, but slightly below the Zacks Consensus Estimate of $5,533 million, with comparable store sales improving by 2% [3][7] Financial Performance - The cost of goods sold (COGS) was $4 billion, up 5.5% year over year, representing 72.4% of sales, an increase of 70 basis points from the previous year [8] - Operating income declined 3.2% year over year to $638.3 million, with an operating margin of 11.5%, down 95 basis points due to tariff-related costs [10] - The company ended the quarter with cash and cash equivalents of $3.8 billion and long-term debt of $1.02 billion [11] Store Expansion and Future Outlook - In the second quarter, Ross Stores opened 28 new Ross and 3 dd's DISCOUNTS stores, bringing the total to 2,233 stores [13] - For the third quarter of fiscal 2025, the company expects to open 40 new stores and anticipates comparable store sales growth of 2-3% [14][16] - Management projects EPS for the third quarter to be between $1.31 and $1.37, reflecting a negative impact of 7-8 cents per share from tariffs [16][18]