Ross Stores Inc (0KXO.L) Q2 2024 Earnings Report

Executive Summary: Ross Stores delivered a solid quarter from a cash-flow perspective while facing a meaningful revenue challenge. Revenue in QQ2 2024 reached $5.288 billion, down 12.2% year over year, as consumer spending remained under pressure in discretionary categories. Despite the top-line softness, gross margins held firm at approximately 28.3%, yielding a net income of $527.1 million and earnings per diluted share of $1.59-$1.60. Operating and net margins remained constructive at roughly 12.5% and 10.0%, respectively, underscoring effective cost control and promotional discipline in a promotional retail environment. Cash flow remains a standout attribute: operating cash flow was $592.1 million with free cash flow of about $394.6 million. The company finished the period with cash and cash equivalents around $4.667 billion and total debt of $5.864 billion, resulting in a net debt position of about $1.20 billion. Ross continued to return capital to shareholders via share repurchases of $263.7 million and dividends of $122.5 million, contributing to a healthy balance sheet and supportive liquidity footing. Looking ahead, the company faces the macro headwinds affecting discretionary retail but remains positioned to leverage its off-price model, scale, and inventory discipline. Investors should monitor top-line trends, markdown cadence, inventory levels, e-commerce momentum, and ongoing capital-allocation decisions as drivers of long-term profitability and capital efficiency.