Ross Stores(US:ROST)2025-11-20 22:17Financial Data and Key Metrics Changes - Total sales for the third quarter grew 10% to $5.6 billion, with comparable store sales increasing by 7% [5][6] - Earnings per share for the third quarter were $1.58, compared to $1.48 in the prior year, with net income of $512 million [6][7] - For the first nine months, earnings per share were $4.61, up from $4.53 in the same period last year, with net earnings of $1.5 billion [7] Business Line Data and Key Metrics Changes - Strongest merchandise areas in the third quarter included cosmetics, shoes, and ladies' apparel [8] - The branded strategy has positively impacted the ladies' business, which comped above the chain average [10] Market Data and Key Metrics Changes - Geographic performance showed broad-based strength, particularly in the Southeast and Midwest regions [8][12] - The company opened 36 new Ross and four dd's DISCOUNTS stores during the third quarter, completing its expansion program for 2025 [9] Company Strategy and Development Direction - The company has fully embedded its branded strategy into its merchandising approach, focusing on delivering high-quality branded bargains [9][10] - The marketing campaigns have been updated to resonate with younger customers, aiming to enhance customer engagement [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, raising the comparable store sales forecast to 3-4% and earnings per share guidance for fiscal 2025 to $6.38-$6.46 [13][14] - The company expects tariff-related costs in the fourth quarter to be negligible, indicating improved cost management [14] Other Important Information - The company repurchased 1.7 million shares for an aggregate cost of $262 million, remaining on track to buy back a total of $1.05 billion in shares this year [13] - Total consolidated inventories were up 9% versus last year, with average store inventories up 15% as the company prepared for the holiday season [8] Q&A Session Summary Question: Can you break down the inflection in same-store sales? - Management noted broad-based strength across all major merchandise categories and regions, attributing some improvement to internal initiatives and favorable weather conditions [20][22] Question: What are the major drivers of the improvement in momentum? - Management highlighted the sophistication of the merchandising team and the importance of aligning merchandising, marketing, and store operations for growth [25][26] Question: How are you addressing the marketing changes? - The company is focused on creating a refreshed marketing message to engage both new and lapsed customers, with early positive results [41][42] Question: What is the outlook for the branded strategy? - Management sees continued opportunity for growth in the ladies' business and believes the branded strategy will yield further improvements [48][50] Question: How are you managing tariff-related costs? - The company has successfully mitigated tariff impacts through strategic vendor partnerships and closeout opportunities, expecting negligible costs in the fourth quarter [34][82] Question: What is the status of self-checkout implementation? - Self-checkout has been rolled out to 80 stores, showing positive customer adoption and sales impacts, with plans for further expansion [78] Question: How is the home business performing? - The home business has shown sequential improvement, and management feels well-positioned for the holiday season despite previous weaknesses [112][113]