Ross Stores (ROST) Q1 2023 Earnings Call Transcript

For the period ending April 29, 2023

May 18, 2023 4:15 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to the Ross Stores First Quarter 2023 Earnings Release Conference Call. The call will begin with prepared comments by management, followed by a question-and-answer session. [Operator instructions]

Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, new store openings, and other matters that are based on the company's current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today's press release and the company's fiscal 2022 Form 10-K and fiscal 2023 Form 8-Ks on the file with the SEC.

And now I'd like to turn the call over to Barbara Rentler, Chief Executive Officer. Please go ahead.

Barbara Rentler

Good afternoon. Joining me in our call today are Michael Hartshorn, Group President, Chief Operating Officer, Adam Orvos, Executive Vice President and Chief Financial Officer, and Connie Kao, Group Vice President, Investor Relations. We'll begin our call today with a review of our first quarter 2023 performance, followed by our outlook for the second quarter and fiscal year. Afterwards, we'll be happy to respond to any questions you may have.

As noted in today's press release, despite continued inflationary pressures impacting our low to moderate income customers, first quarter sales were relatively in line with our expectations. Total sales of $4.5 billion, up from $4.3 billion last year, while comparable store sales rose 1%. Earnings per share for the 13 weeks ended April 29, 2023, for $1.09, a net income of $371 million. These results compare to $0.97 per share on net earnings of $338 million for the 13 weeks ended April 30, 2022.

Cosmetics and accessories were the strongest merchandise areas during the quarter, while the Midwest was the top performing region. dd’s DISCOUNTS performance in the first quarter continued to trail raw, reflecting the aforementioned inflationary pressures that continue to have a larger impact on our lower income households. By quarter end, total consolidated inventories were down 16% versus last year. Average store inventories were up 2% at the end of the quarter. Packway merchandise represented 42% of total inventories versus 43% last year.