- Strong Q1 Performance: Total sales rose 21% to $6.0B; EPS grew 37% to $2.02.
- Margin Expansion: Operating margin widened 120 bps to 13.4% (merchandise +85 bps; occupancy +60 bps).
- Store Growth Strategy: Opened 13 Ross and 4 dd's DISCOUNTS stores; plans 110 new units (5% unit growth) in 2024.
- Customer Acquisition Momentum: Double-digit comp growth (17%) driven by broad demographic and regional expansion, including younger demographics.
- Guidance Raised: 2026 EPS guidance of $7.50–$7.74; cosmetics category surged due to Korean beauty and brand availability.
Q1 Highlights
The quarter’s 17% comp growth was driven by a strong top‑line performance and a 70‑75% store‑productivity rate that exceeded guidance. New store openings—13 Ross and 4 dd’s DISCOUNTS locations—contributed to the sales lift, and the firm’s focus on cosmetics, especially Korean beauty products, added a premium category that boosted margins.
Margin Expansion
Operating margin growth stemmed from improved merchandise margins and a tighter SG&A structure, even as the company invested in marketing and store experience. The firm’s ROIC of 19.06% underscores efficient capital deployment, while the 120‑basis‑point margin expansion signals strong cost discipline.
Store Expansion & Growth
Ross plans 110 new stores this year, targeting 5% unit growth, with 20% of that in newer Northeast markets. New‑store productivity has already surpassed 70% guidance, and the company’s store refresh initiatives are expected to enhance the shopping experience and attract younger shoppers, particularly 18‑to‑24 year‑olds.
Guidance & Outlook
For Q2, the company forecasts 6%‑7% comparable sales growth and EPS of $1.85‑$1.93, while it has raised fiscal 2026 sales and earnings guidance to 6%‑7% comp sales and $7.50‑$7.74 EPS. Fuel surcharges are a potential headwind, but the firm believes its comp growth and merchandising strategy will offset the impact. The company remains on track to buy back $1.275 billion in stock during 2024.
Shareholder Return & Valuation
With a dividend yield of 0.71% and a free‑cash‑flow yield of 3.47%, Ross offers modest income alongside growth. The 1.5 million share repurchase in Q1 cost $319 million, underscoring management’s confidence in the stock’s valuation. Analysts project 11.6% revenue growth next year, positioning Ross as a disciplined, growth‑oriented retailer in a competitive discount landscape.