Ross Stores is cutting back in response to the impact of COVID-19 on the company’s operations.
The off-price retailer said that it is reducing its capital expenditure and expense plans and realigning inventory positions to meet the current demand.
“While February sales were ahead of its expectations, the company has experienced a broad-based deceleration in sales trends over the past week from the continued spread of the virus throughout the country and the mandatory closure of stores in certain markets. Further, additional store closures are expected,” Ross stated.
Citing “this unprecedented period of uncertainty, including the unknown duration and overall impact on consumer demand,” Ross is withdrawing its first quarter and 2020 full-year sales and earnings guidance. (Ross Stores reported fourth-quarter earnings that beat expectations on March 3 and, a few days later, announced plans to open some 100 stores.)
The company is temporarily suspending its stock repurchase program and is drawing down $800 million under its revolving credit facility to add to its cash balances.
“I want to emphasize that our company began 2020 in a strong financial position,” said CEO Barbara Rentler. “We are proactively taking these early actions to further increase our liquidity and flexibility to successfully manage through these challenging times.”