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Investing.com -- Ross Stores Inc (NASDAQ:ROST) shares rose 3.7% in after-hours trading Thursday after the off-price retailer posted third-quarter results that topped Wall Street expectations and raised its full-year outlook. The company was buoyed by robust comparable sales growth and disciplined expense control, reinforcing investor confidence ahead of the holiday season.
Ross reported third-quarter earnings per share of $1.58, surpassing the consensus estimate of $1.41 and up from $1.48 a year earlier. Revenue for the period grew 10% year over year to $5.6 billion, ahead of the $5.42 billion forecast by analysts, driven by a 7% increase in comparable store sales.
Operating margin expanded to 11.6%, bolstered by top-line strength and cost efficiencies, despite an estimated $0.05 per share negative impact from tariff-related costs this quarter. Net income rose to $512 million, up from $489 million in the prior-year period.
“We are pleased with our third quarter sales results, which accelerated from the prior quarter,” said CEO Jim Conroy. “Our merchandise assortment of compelling brand name values resonated with shoppers, and our new marketing campaign drove excitement and higher customer engagement.”
Ross Stores ended the quarter with 2,273 locations, including growth under its Ross Dress for Less and dd’s DISCOUNTS banners, up from 2,192 stores a year ago. The company repurchased 1.7 million shares in the third quarter for $262 million, remaining on track to complete a $2.1 billion buyback program by year-end.
Looking into the crucial fourth quarter, the company sees EPS in the range of $1.77 to $1.85, higher than analyst expectations of $1.80 at the midpoint, and lifted its holiday-season comparable store sales forecast to 3% to 4%. “This updated guidance range reflects approximately $0.03 earnings per share of unfavorable timing of packaway-related expenses that benefited the third quarter,” Conroy noted.
Ross Stores now expects full-year 2025 EPS between $6.38 and $6.46, compared with $6.32 last year, despite an approximate $0.16 per share hit from tariffs. The updated forecast shows management’s confidence in continued sales momentum and margin resilience across a volatile retail landscape.
Investors appear encouraged by Ross’ ability to navigate inflationary pressures and execute effectively against a competitive backdrop, particularly heading into the holiday quarter. With strong comp sales, lean inventory management, and a clear focus on value, Ross remains well-positioned to grow its customer base and capture additional share in the off-price segment.