Off-price retailer Ross Stores has posted a net income of $610 million for the fourth quarter, up from $447 million last year.

Sales for the 14 weeks ended February 3 grew to $6 billion, with comparable store sales for the 13 weeks ended January 27 up 7 per cent year on year.

Neil Saunders, MD of GlobalData, said the strong set of numbers shows that the off-price sector is “one of the stars of the retail show”. 

“During the quarter, Ross grew sales by 15.5 per cent. While this is flattered by an additional week of trading, Ross still expanded the top line by a robust 9.6 per cent – well above its average growth rate for the rest of the year. Comparable sales rose by 7 per cent which, again, is an outperformance.”

Saunders said the company benefitted from constrained consumers trading down and shopping around more over the holiday period. New store openings also helped boost the numbers, he added.

“With good inventory control resulting in less discounting, and a good sell-through of higher priced items, Ross is also punching out slightly better product margins.”

For the full year, Ross Stores reported net earnings of $1.9 billion and sales of $20.4 billion, up from net earnings of $1.5 billion and sales of $18.7 billion in FY22. Comparable store sales for the 52 weeks ended January 27 also rose 5 per cent.

“Overall, this has been a good fiscal year for Ross. Given the company’s exposure to price-sensitive shoppers, the continued pressure on household finances could well have blown the company off course.

“However, strong operational control and a constant focus on the shoppers and their needs have served Ross well,” Saunders continued.

The company expects same-store sales to grow 2 to 3 per cent for the first quarter ending May 4 as well as for the full fiscal 2024.  

“While we are encouraged by the sustained sales momentum that began in the second quarter of 2023 and continued through the holiday season, there remains ongoing uncertainty in the macroeconomic and geopolitical environments,” said Barbara Rentler, CEO of Ross Stores.

“In addition, while inflation has moderated, housing, food, and gasoline costs remain elevated and continue to pressure our low-to-moderate income customers’ discretionary spend. 

“As a result, while we hope to do better, we believe it is prudent to continue to take a conservative approach to forecasting our business in 2024,” Rentler concluded.

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