Skip to main content

Ross Stores Q1 sales up 8% as shoppers continue to hunt for off-price bargains

Coeur d'Alene, Idaho USA - May 30 2023: General view of the entrance and facade of a Ross Dress For Less, an American chain of discount department stores, in Coeur d'Alene, Idaho, USA; Shutterstock ID 2311941335
Ross' first-quarter revenue rose 8% to $4.9 billion. Same-store rose 3%.

Ross Stores reported better-than-expected first-quarter earnings and revenue even as inflation continues to squeeze its core shoppers. 

The company also raised its earnings forecast amid lower costs and traffic gains.

Ross’ net income totaled $488 million, or $1.46 a share, for the quarter ended April 29,  compared with $371 million, or $1.09 a share, in the year-ago quarter. Analysts had expected earnings of $1.35 per share.

Revenue increased 8% to $4.9 billion, topping estimates of $4.83 billion. Same-store were up 3%, primarily driven by an increase in traffic.

“Though we had hoped to do better, first quarter sales were in line with guidance despite macroeconomic headwinds that continued to pressure our customers’ discretionary spending,” said CEO Barbara Rentler. “Earnings results for the period were better-than-expected primarily due to lower expenses relative to our plan.”

Ross' operating margin was 12.2%, compared to 10.1% a year ago. The improvement was primarily driven by lower distribution, incentive and freight costs that were partially offset by the planned decline in merchandise margin, the company noted. 

Looking ahead, Rentler said that ongoing uncertainty in the macroeconomic and geopolitical environments, including prolonged inflation, continue to squeeze Ross’ low-to-moderate income customers’ purchasing power. 

“As a result, we believe it is more important than ever to offer our customers the best branded values possible,” she said. “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.”

The retailer company 11 Ross stores and 7 DD’s Discounts locations during the quarter. On the earnings call, Rentler said the company continues to plan for approximately 90 new stores this year, comprised of about 75 Ross and 15 DD's locations. 

Ross raised its full-year earnings outlook to $5.98 per share from $5.79 per share. Its same-store sales outlook remains unchanged for a 2% to 3% gain.

During the first quarter of fiscal 2024, a total of 1.9 million shares of common stock were repurchased for an aggregate price of $262 million under the company’s new two-year $2.1 billion authorization approved by its board in March 2024. Ross remains on track to buy back a total of $1.05 billion in common stock during fiscal 2024.

The company operates 1,775 Ross stores in 43 states, the District of Columbia and Guam. It also operates 352 DD’s Discounts stores in 22 states.

This ad will auto-close in 10 seconds