Ross Stores Q3 Earnings Raise Full-Year Outlook
Ross Stores Q3 earnings raised fiscal 2025 EPS outlook after stronger same-store sales, tightening trader positioning ahead of holiday demand.
KEY TAKEAWAYS
- Ross Stores raised fiscal 2025 GAAP EPS guidance to $6.38-$6.46.
- Q3 EPS was $1.58 on $5.6 billion sales with same-store sales up 7.0%.
- Free-cash-flow margin improved to 11.0% from 6.6% year over year.
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Ross Stores reported third-quarter earnings on Nov. 20, 2025, prompting management to raise its fiscal‑2025 earnings per share (EPS) outlook. The company cited stronger consumer demand and merchandising momentum that it expects to support holiday‑season results.
Quarter Results and Guidance
Ross Stores said in its earnings release that third-quarter net income reached $512 million, with diluted EPS of $1.58 on sales of $5.6 billion, a 10.4% increase year over year. Same-store sales rose 7%, up from 1% in the third quarter of 2024. This acceleration in top-line growth underpinned management’s decision to raise its full-year guidance.
The company now expects fiscal 2025 GAAP EPS between $6.38 and $6.46 and set fourth-quarter EPS guidance at $1.77 to $1.85. Management attributed the revision to year-to-date results and an updated forecast for the fourth quarter. It anticipates comparable-store sales growth in the final quarter, driven by robust holiday demand amid ongoing consumer focus on value and macroeconomic uncertainty.
Operations and Cash Flow
Ross maintained an operating margin of 11.6%, flat year over year, while its free-cash-flow margin expanded to 11.0% from 6.6% in the prior-year quarter. Management credited this improvement to strong sales combined with continued expense control, which enhanced cash conversion.
Tariff-related costs reduced EPS by about $0.05 in the quarter. The company repurchased 1.7 million shares and ended the period with 2,273 stores, up from 2,192 a year earlier. Management described momentum as broad-based across merchandise categories and regions.
CEO Jim Conroy said, "We are pleased with our third quarter sales results, which accelerated from the prior quarter. Our merchandise assortment of compelling brand name values resonated with shoppers, and our new marketing campaign drove excitement and higher customer engagement."
The company said stronger traffic, effective promotions, and a focused merchandising assortment support its confidence heading into the holiday season despite tariff headwinds. No material regulatory or approval matters were disclosed in the quarter’s release or filings.
