The paragraph introduces a conference call for Ross Stores' fourth quarter and fiscal 2024 earnings release. It mentions that the call will include comments from management and a Q&A session, and it contains forward-looking statements subject to risks and uncertainties. Connie Kao, the Group Vice President of Investor Relations, introduces Jim Conroy, the new Chief Executive Officer, who expresses gratitude to his predecessor, Barbara Rentler, for a smooth transition. Conroy acknowledges Rentler's ongoing role as a Strategic Adviser and prepares to discuss the company's fourth quarter results.

The press release highlights that fourth quarter sales and earnings exceeded expectations due to improved product assortments and strong holiday season execution. Earnings per share were slightly lower at $1.79 compared to $1.82 the previous year, with net income reaching $587 million versus $610 million. Fourth quarter sales hit $5.9 billion, showing a 3% increase in comparable store sales. For the fiscal year, earnings per share rose to $6.32 from $5.56, and net income increased to $2.1 billion from $1.9 billion. Total sales for the year were $21.1 billion, up from $20.4 billion, with a 3% growth in comparable store sales. Results included a onetime earnings benefit of $0.14 per share from selling a facility. Prior year had an extra 53rd week, adding $308 million in sales and $0.20 in earnings per share. Fourth quarter operating margin remained flat at 12.4% due to facility sale gains and planned declines in merchandise margin.

During the holiday season, cosmetics and children's merchandise performed best, with the Pacific Northwest and Texas leading in sales regions. DD's discounts saw strong sales gains, particularly in new markets. Consolidated inventories increased by 12%, mainly due to higher planned packaway levels, which now represent 41% of total inventories. The store network expanded with 75 new Ross Dress for Less stores and 14 dd’s DISCOUNTS, totaling 2,186 stores after 12 closures. The company repurchased 7.3 million shares in fiscal 2024 for $1.05 billion, part of a $2.1 billion program initiated in March 2024, with $1.05 billion left to be completed in fiscal 2025. The Board approved a 10% increase in the quarterly cash dividend, and the company ended the year with $4.7 billion in cash, reflecting their commitment to returning excess cash to shareholders.

In the fourth quarter, comparable store sales increased by 3%, with stable operating margins and benefits from a facility sale. However, costs of goods sold and merchandise margins were impacted by various factors, such as quality branded assortments and the anniversary of an extra week last year. Looking ahead to fiscal 2025, particularly the first quarter, the company expects comparable store sales to range from a 3% decrease to remaining flat. This cautious outlook is due to softening sales trends, unseasonable weather, and macroeconomic and geopolitical uncertainty. Earnings per share are projected to be between $1.33 and $1.47, with total sales expected to fluctuate between a 1% decrease and a 3% increase compared to the previous year's first quarter.

The paragraph outlines the financial projections and operational plans for a retail company. For the first quarter, the operating margin is expected to decrease to 11.4%-12.1% due to sales deleverage and timing issues with packaway costs. The company plans to open 19 new stores during this period. For fiscal 2025, they project same-store sales to range from a 1% decrease to a 2% increase, with total sales growth between 1%-5%. Earnings per share are estimated to be $5.95 to $6.55, slightly lower than the previous fiscal year due to a one-time facility sale benefit in 2024. Operating margins for the year are projected between 11.5%-12.2%. Additionally, the company expects to open approximately 90 new stores while closing or relocating 10-15 older stores. The estimated net interest income is $127 million, with a tax rate expected between 24%-25%.

The paragraph discusses the company's financial forecasts and strategies amid a challenging business environment. Depreciation and amortization expenses are expected to be around $690 million, with a tax rate of 24-25% and 325 million weighted average diluted shares. Capital expenditures for 2025 are planned at $855 million to support growth. Despite softer business due to macroeconomic pressures affecting consumer confidence, the company sees this as potentially temporary and anticipates opportunities for deals on branded goods. The company remains confident in its brand and merchandising strategies for Ross and dd's and highlights its flexible business model as an advantage in navigating uncertainty. The company's leadership thanks its associates for achieving solid results.

In the paragraph, Matthew Boss from JPMorgan asks Jim Conroy about his strategic priorities and potential structural changes to improve market share. Jim Conroy, who has recently joined, mentions that while the existing brand and customer strategies for Ross and dd's are solid, he sees opportunities for evolutionary changes rather than abrupt shifts. He praises the company's merchandising and operational efficiency but identifies room for improvement in enhancing the store environment and customer experience. Additionally, he notes that marketing is the least developed area, suggesting a need for greater investment and visibility for the brand.

The paragraph discusses the performance of two brands during a recent quarter, highlighting strong results across various geographies and merchandise categories, specifically noting standout performances in children's and cosmetics. It acknowledges some decline in business in weather-impacted areas but mentions improvement starting in February, attributed to rising consumer confidence and changing weather conditions. The expectation is that these issues are temporary, and consumer engagement is rebounding. Matthew Boss expresses appreciation for the update, and Jim Conroy indicates confidence in the guidance provided for the quarter. A subsequent question from Paul Lejuez addresses regional performance in the fourth quarter and the potential impact of new immigration policies on sales. Michael Hartshorn is also mentioned.

The paragraph discusses a company's performance and outlook in various regions, with the Pacific Northwest and Texas being top performers, while California and Florida are in line with the chain. It touches on the impact of immigration policy on their customer base, particularly the Hispanic demographic. The company does not plan based on traffic or transactions but has observed that recent comp performance is more traffic-related due to external volatility. Paul Lejuez asks about comp guidance for the future, questioning whether the slowdown is due to transactions or average ticket size. Michael Hartshorn responds that the business isn't planned on those metrics, noting a traffic-related trend. Mark Altschwager questions about the merchandise margins being neutral for the year and seeks clarity on their merchandising strategy and investment. The conversation suggests a balancing act in maintaining value and assortment, with ongoing adjustments post-holiday buying environment.

The paragraph features a conversation among several individuals, including Adam Orvos, Michael Hartshorn, Jim Conroy, and Mark Altschwager, discussing their business strategies and market conditions for 2024 and 2025. Adam mentions focusing on changing their branded goods' penetration in 2024, with 2025 dedicated to learning from customer feedback. Both Adam and Michael mention maintaining a neutral merchandise margin. Jim notes that disruptions in mainstream retail and the supply chain present opportunities for closeout product acquisitions, benefiting their off-price industry by allowing them to acquire margin accretive goods. The conversation hints at enhancing store environments and marketing efforts leading to potential increased spending. Meanwhile, Lorraine Hutchinson from Bank of America links these strategic enhancements to increased costs.

In the article paragraph, Jim Conroy discusses the company's approach to investing in its store fleet and marketing expenses. He suggests that while they need to be prudent and show a return on investment for any additional spending, there may be opportunities to invest in those areas over time. Conroy mentions that the company has been upgrading its fleet recently and plans to continue doing so, along with potentially enhancing their marketing program. Lorraine Hutchinson then thanks him, and the conversation shifts to Michael Binetti, who asks about the company's guidance for the remainder of the year regarding same-store sales and merchandise margin. Binetti seeks clarity on expectations for sales performance and whether the company will leverage a better brand strategy by the second half of the year.

The paragraph features a discussion between Michael Hartshorn, Adam Orvos, and Michael Binetti on the year’s sales trends and merchandise margins. Michael Hartshorn mentions that the company’s sales comparisons (comps) are expected to be neutral across the second, third, and fourth quarters to achieve an overall range of down 1% to up 2%. Adam Orvos explains factors impacting merchandise margins, such as branded strategy, tariffs, and shrink, noting they foresee margins remaining flat due to a tough external environment. Michael Binetti asks about shrink for the fourth quarter and 2024, to which Hartshorn responds that inventory checks are done in the third quarter and indicated no change in forecast, keeping it flat to 2023. Brooke Roach from Goldman Sachs inquires about the performance of dd's DISCOUNTS and its impact on store growth plans, asking if it's experiencing the same slowdown as Ross Stores.

In the dialogue between Brooke Roach, Michael Hartshorn, and Chuck Grom, they discuss the positive sales performance of dd's, which has outpaced Ross in recent periods, and the plans to restart the real estate program for expansion following a pause. Both dd's and Ross experienced similar sales trends in early 2024. Chuck Grom inquires about inventory levels and potential promotional impacts, as well as performance split across categories like apparel, footwear, cosmetics, and beauty. Michael Hartshorn expresses confidence in the current inventory levels, noting they ended the year with an increase of about 2% in average store inventory.

The paragraph discusses the company's strategic plan concerning packaway merchandise and its impact on their financial results. Jim Conroy notes that non-apparel products outperformed apparel and footwear, highlighting the strength in the children's footwear segment. Alexandra Straton from Morgan Stanley inquires about the guidance related to freight costs and supply chain investments. Michael Hartshorn explains that current freight contracts run until May-June, with domestic freight expected to be a headwind, while ocean freight costs have decreased recently. Adam Orvos addresses the CapEx guidance, noting an increase to $855 million for 2025, with most of the increase allocated to supply chain enhancements.

The paragraph discusses plans and financial considerations for future facilities and investments in the merchant organization. The company is opening its eighth facility this year, while the ninth, which is driving costs, will be constructed mainly in 2025 and open in 2-3 years. Investments are focused on improving tools and data for the merchant team to enhance business operations. During a Q&A, the tariff's impact is discussed, indicating that direct sourcing exposure to tariffs from China, Canada, and Mexico is minimal. The company is monitoring tariff policy changes, and there are questions about branded product performance and its effects on margins and average transaction value (ATV).

The paragraph features a conversation between analysts and executives regarding a company's pricing strategy, brand assortment, and store expansion. The executives emphasize their commitment to maintaining competitive pricing and leveraging closeout opportunities without leading price increases. They are at an inflection point with their branded goods assortment, noting a slight past increase in Average Unit Retail (AUR) without planning future business that way. The discussion then shifts to store opening strategies, with a focus on the potential for different store formats in rural and urban areas. Recent store performances in new states like Michigan and New York are also queried, along with the impact of the branded strategy on comparable sales. The executives express confidence in growth opportunities with the current store concepts, specifically in their smaller formats like DD's 18,000 to 20,000 square foot stores.

The paragraph discusses Ross's real estate and branding strategy. The company has a store footprint of 23,000 to 25,000 square feet and is taking advantage of store closures to expand, with 30% of new openings in newer markets. While it's too early to discuss specific results in New York and Michigan, overall new store productivity remains consistent with last year, and similar levels are expected for 2025. Jim Conroy expresses confidence in the company's branded strategy, which has driven four consecutive quarters of positive comparable sales across various merchandise categories. There have been improvements in the ladies' business, and the company's branding goals were met for the first time in the fourth quarter. The strategy appears solid, with ongoing efforts for enhancement. Finally, there is an operator cue for the next question from Ike Boruchow with Wells Fargo.

The paragraph is a section of a conference call where Irwin Boruchow seeks clarification on a previous statement from Michael Hartshorn, correcting "headwind" to "tailwind." Boruchow then asks about the factors contributing to a business slowdown, specifically weather-related issues versus demographic changes, focusing on the Hispanic consumer. Hartshorn explains the difficulty in distinguishing these impacts due to the timing of weather changes and tax refund delays. Marni Shapiro then congratulates the team on a successful quarter and humorously notes the unusual absence of anyone named Mike on the Ross Stores conference call.

The paragraph is an excerpt from a conversation during a business call where marketing strategies and challenges faced by the company are discussed. Jim Conroy mentions that it's too early to provide detailed specifics on the company's advertising plans but indicates potential investments in marketing and suggests improvements in messaging. The company is onboarding a new ad agency, which should help refine their plans. Marni Shapiro asks about the impact of fires in L.A. on the business, to which Michael Hartshorn responds that the fires had some effect, but the impact was minimal for the quarter, and recovery has been seen. John Kernan asks about the increase in the SG&A rate compared to the pre-COVID period. Conroy doesn't provide a detailed answer but acknowledges the question.

The paragraph involves a discussion about the challenges and strategies regarding Selling, General and Administrative (SG&A) expenses. Michael Hartshorn highlights that post-COVID changes in SG&A are mainly due to increased store-related costs driven by minimum wage hikes. While they seek efficiencies that do not affect customer experience, a 3% annual sales comp increase is needed for better SG&A leverage going forward. Dana Telsey then asks Jim Conroy about his previous experience at Boot Barn and what he can bring to Ross Stores. Conroy notes the differences in the business models, but also identifies similarities in customer demographics. He emphasizes his role as CEO in aligning the team and strategy for future success at Ross Stores.

The paragraph involves a discussion with management, highlighting their cohesiveness and strong talent, especially in merchandising roles, as they build on previous successes. Dana Telsey inquiries about how the business plans to handle tariffs, referencing past strategies like cost negotiation and price adjustments. Michael Hartshorn notes it will likely be similar, depending on market responses. Jim Conroy adds that the team is frequently addressing this issue and has strategies to manage supply chain disruptions effectively. The operator introduces the next question from Jay Sole with UBS.

The paragraph discusses a conversation between analysts and company representatives about the reasons behind a wider-than-usual comp range, attributed to decreased visibility at the start of the year. Michael Hartshorn mentions that there has been an improvement in the comp trend since early February due to better weather, which has been factored into the first-quarter guidance. Jay Sole confirms that the guidance reflects expected continued improvement. Krisztina Katai from Deutsche Bank asks about the improvement in specific business areas, like ladies apparel, and attributes it to a branded strategy. Jim Conroy acknowledges the progress in achieving branding targets and the successful assortment content during the holiday period, which positively affected the comp line.

In the paragraph, a discussion takes place regarding the company's strategies for improving retail performance. The team is focused on optimizing assortments for the upcoming spring and fall seasons across various classifications like sportswear and juniors. An analyst asks about the company's wider-than-normal full-year sales projections and whether these projections can be met through favorable weather alone, or if market share or macroeconomic conditions need to improve as well. Michael Hartshorn responds that while better weather would be beneficial, the overall macroeconomic environment plays a significant role. However, he emphasizes that their off-price retail model is resilient and can thrive even in challenging macroeconomic conditions, referencing successful navigation during the 2008-2009 financial crisis.

In the paragraph, Jim Conroy thanks participants for joining the call and looks forward to the next earnings call, after which the operator concludes the teleconference, thanking everyone for their participation and informing them that they may disconnect.

This summary was generated with AI and may contain some inaccuracies.