Ross Stores traded up 7.8% after reporting a significant comp sales beat and strong margin expansion in the first quarter. The market responded positively to robust top-line growth driven by transaction increases and better-than-expected operating leverage.
- First quarter total sales rose 21% to $6.0 billion, driven by a 17% comp increase primarily from higher customer transactions.
- Operating margin expanded 120 basis points to 13.4%, aided by a 145 basis point reduction in cost of goods sold and leverage in occupancy costs.
- Earnings per share increased 37% to $2.02, supported by both sales growth and margin improvements.
- Inventories were up 12%, with packaway inventory as a lower percentage than last year, indicating improved stock composition.
- Management raised full-year sales and earnings guidance following strong Q1 results and anticipates steady comp growth of 6%-7% with continued margin gains.
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