Rost Stores Q4 Earnings & Sales Beat Estimates, FY26 View Optimistic

Core Insights - Ross Stores, Inc. (ROST) reported strong fourth-quarter fiscal 2025 results, with earnings and sales exceeding expectations and showing year-over-year growth [1][2]. Financial Performance - Earnings per share (EPS) reached $2.00, surpassing the Zacks Consensus Estimate of $1.88 and the company's guidance of $1.77 to $1.85, with a 21% increase when excluding a gain from a facility sale [2]. - Total sales amounted to $6.64 billion, a 12% increase year over year, exceeding the Zacks Consensus Estimate of $6.4 billion, with comparable store sales improving by 9% [3]. - The cost of goods sold (COGS) rose 11.2% year over year to $4.8 billion, but as a percentage of sales, it declined by 65 basis points [5]. - Operating income increased by 11.4% year over year to $814.1 million, with the operating margin slightly contracting to 12.6% [8]. Shareholder Returns - The company completed $1.05 billion in share buybacks and increased its quarterly dividend by 10% [7]. - A new two-year share repurchase authorization of $2.55 billion was approved, marking a 21% increase from the previous program [11]. Store Expansion - In fiscal 2025, Ross Stores opened 80 new Ross Dress for Less stores and 10 dd's DISCOUNTS locations, expanding into new markets including the New York Metro area and Puerto Rico [13]. - The company plans to open 110 new locations in fiscal 2026, including 85 Ross stores and 25 dd's DISCOUNTS, reflecting a 5% expansion of its store base [14]. Future Outlook - For fiscal 2026, the company projects EPS of $7.02-$7.36, with comparable store sales growth of 3-4% and total sales growth of 5-7% [20]. - The anticipated operating margin is expected to improve to 12-12.3% from 11.9% in fiscal 2025, driven by gains in merchandise margin and lower distribution costs [20].