Ross Stores (NASDAQ:ROST) Q4 2023 Earnings Conference

By / / Ross Stores

The following is a summary of the Ross Stores, Inc. (ROST) Q4 2023 Earnings Call Transcript:

Financial Performance:

  • Ross Stores exceeded Q4 predictions, with earnings per share rising to $1.82, a significant leap from the previous year’s $1.31.
  • The company saw Q4 2023 sales climb to $6 billion, boosted by a 7% increase in comparable store sales.
  • Net income for fiscal year 2023 rose to $1.9 billion from $1.5 billion recorded in the previous year, whilst earnings per share increased to $5.56 from $4.38.
  • The 2023 fiscal year results included a beneficial $308 million and an additional $0.20 per share due to the 53rd week.
  • Q4 saw an operating margin increase of approximately 165 basis points to 12.4%.
  • The company repurchased 1.9 million shares of common stock for $247 million in Q4 and 8.2 million shares for $950 million throughout the fiscal year.
  • For 2024, earnings per share are projected to land in the range of $5.64 to $5.89.

Business Progress:

  • Top-performing merchandise areas in Q4 included cosmetics, home goods, and children’s items.
  • Ross Stores aims to attract sales and increase market share in 2024 by offering more competitively priced brands, with a focus on enhancing the apparel business collection.
  • In 2023, 94 new Ross Stores were opened, bringing the total to 2,109 stores by year’s end.
  • The company has approved a new 2-year $2.1 billion stock repurchase program along with a 10% increase in their quarterly cash dividend.
  • Expansion of dd’s stores in new markets will be moderated while an extensive evaluation is carried out to understand customer needs.
  • Ross Stores plans to open approximately 90 new stores in 2024 (75 Ross and 15 dd’s), whilst expecting to close or relocate 10-15 older stores.
  • An estimated $840 million will be allocated towards capital expenditure in 2024 to enhance stores, supply chain, and merchant processes, increasing overall efficiency.
  • The company is investing in furthering efficiencies and related cost savings, expected to yield about 3% EBIT leverage along with double-digit EPS growth.
  • Ross Stores continues to invest in limiting the impact of external theft and keeping shrinkage levels steady.
  • They are also contemplating utilizing AI applications for improved business efficiencies.
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