Ross Stores has reported an 8 per cent boost in first-quarter sales, but the CEO of the discount apparel and homewares chain confessed “we had hoped to do better”.
Net earnings of $1.46 per share for the 13 weeks to May 4, was significantly higher than the $1.09 of a year earlier, at $488 million to $371 million. Sales reached $4.9 billion, 400 million more than last year, with comp-store sales up 3 per cent.
Barbara Rentler, CEO, said that the sales were in line with guidance, “despite macroeconomic headwinds that continued to pressure its customers’ discretionary spending”.
Earnings results for the period were better-than-expected primarily due to lower expenses relative to Ross’ focus on reducing distribution, incentive, and freight costs, which helped improve the company’s operating margin from 10.1 per cent to 12.2 per cent.
For the current quarter, Rentler anticipates a further 2 per cent to 3 per cent improvement in sales on top of last year’s 5 per cent second-quarter gain.
“Based on our first-quarter results and forward guidance, comparable store sales for the 52 weeks ending February 1, 2025 remain unchanged at up 2 per cent to 3 per cent, with earnings per share for the 2024 fiscal year now projected to be in the range of $5.79 to $5.98 versus $5.56 for the 53 weeks ended February 3, 2024.”
That guidance holds despite what she described as ongoing uncertainty in today’s macroeconomic and geopolitical environments, including prolonged inflation, and a continuing pressure on the purchasing power of the retailer’s low-to-moderate income customers.
“As a result, we believe it is more important than ever to offer our customers the best branded values possible. In addition, we will continue to manage inventory and expenses tightly in order to maximize sales and earnings growth over the balance of the year,” she concluded.
Ross Stores operates 1775 Ross Dress for Less stores offering off-price apparel and home fashion, and 352 DD’s Discounts stores selling off-price name brand apparel, accessories, footwear, and home fashions.
