For the fourth quarter, Ross Stores beat Wall Street earnings and sales forecasts as comparable sales gained substantially.
A Yahoo Finance-published analyst consensus estimate called for earnings per diluted share of $1.65 and revenues of $5.81 billion.
Comparable sales gained 7% year over year. Sales were $6.02 billion versus $5.21 billion in the year-before quarter, the company reported.
Net earnings for the full year were $1.87 billion, or $5.56 per diluted share, versus $1.51 billion, or $4.38 per diluted share, in the year earlier. Sales were $20.38 billion versus $18.7 billion in the year before, Ross noted.
Sales results for the 2023 fourth quarter and fiscal year included a $308 million benefit from the 53rd week. Earnings per share for the quarter and fiscal year also benefited from the extra week, in this case by 20 cents per share.
In a conference call, Barbara Rentler, Ross CEO, said that during the holiday selling season, home, cosmetics, and children’s were the best-performing merchandise categories. In geographic terms, gains were broad-based, with the dd’s Discounts division sales trends slightly trailing the Ross Dress for Less segment. However, Rentler said the company is disappointed with the dd’s performance in newer markets. The company added 94 net new stores in 2023, including 71 Ross Dress for Less and 23 dd’s Discounts, ending the year at 2,109 stores with 1,764 Ross Dress for Less and 345 dd’s locations.
In announcing the financial results, Rentler said, “We are pleased with our fourth quarter sales and earnings results that were well ahead of our expectations. Our above-plan sales were driven by customers’ positive response to our improved assortments of quality branded bargains throughout our stores. Fourth quarter operating margin grew 165 basis points to 12.4%, up from 10.7% in the prior year. This improvement was mainly due to the strong gains in same-store sales and lower freight costs that were partially offset by higher incentives. The 53rd week also benefited operating margin by 80 basis points.”
