Discount department store chain Ross Stores says both sales and earnings for the second quarter are “above” expectations.
For the quarter ended July 30, sales reached $4.9 billion, up 7.7 per cent while comparable store sales were up 5 per cent.
Barbara Rentler, CEO of Ross Stores, said she is “pleased” with the results and added both sales and earnings are “well above our expectations” as customers are responding well to the improved value offerings in-store.
“Despite the recent moderation in inflation, our low-to-moderate income customer continues to face persistently higher costs on necessities. As such, we believe it is prudent to continue to plan the business cautiously.”
Due to the improved second-quarter performance, the retailer has raised its second-half sales and earnings outlook.
“We are now planning comparable store sales for the third and fourth quarters of 2023 to be up 2 per cent to 3 per cent and up 1 per cent to 2 per cent, respectively.
“Based on these assumptions, same-store sales for the 52 weeks ending January 27, 2024, are forecast to be in the range of up 2 per cent to 3 per cent.”
Rentler said the company remains “focused” on delivering the most compelling bargains while also “carefully managing” expenses and inventory to maximize the potential for both sales and earnings growth.
Neil Saunders, MD of GlobalData, said the “upswing in performance” can be attributed to the easing of financial pressures on the Ross customer.
“This is not to say that shoppers are in rude health when it comes to their finances, but the lower price of gas and more modest inflation in areas like food have helped to tame difficulties and put a little more money in people’s pockets.”
Saunders added the second half of the year looks “favourable” for Ross as inflationary pressures should continue to ease which should translate into more spending from shoppers.
“Further, the company’s investments in bargains and prices should continue to entice people into buying. This upside is one of the reasons Ross has raised its second-half guidance. From a usually cautious retailer than normally errs on the downside, this is a good signal that things are starting to pick up.”
