Ross had a solid quarter, with sales and earnings gaining enough to beat Wall Street estimates.
Comparable store sales gained 1% in the quarter year over year, Ross stated. Sales were $4.49 billion versus $4.33 billion in the year-earlier period.
Ross topped a MarketBeat-published analyst consensus estimate for earnings of $1.06 per diluted share and revenues of $4.48 billion.
In a conference call, Barbara Rentler, Ross CEO, said that the company is chasing values so it can pass them on to shoppers but could still do better than it had in the first quarter. She noted that the company opened 11 new Ross and dd’s Discounts locations in the first quarter, and it plans to debut about 100 new stores this year including 75 Ross and 25 dd’s. The numbers don’t reflect plans to close or relocate about 10 stores, she added.
In the conference call, Michael Hartshorn, group president and COO, said the performance of home merchandise was in line with the chain average.
In announcing the financial results, Rentler said, “Despite continued inflationary pressures impacting our low-to-moderate income customers, first quarter sales were relatively in line with our expectations. Operating margin for the period was 10.1%, down from 10.8% in 2022, primarily reflecting higher incentive compensation versus last year when we underperformed our expectations.”
Looking ahead, Rentler noted: “For the 13 weeks ending July 29, 2023, comparable store sales are projected to be relatively flat. Earnings per share for this year’s second quarter are forecast to be $1.07 to $1.14 versus $1.11 for the same period last year. There remains a high level of uncertainty in today’s macroeconomic and geopolitical environments. In addition, prolonged inflationary pressures continue to negatively impact our low-to-moderate-income customers’ discretionary spend. As such, we remain focused on delivering the most compelling values possible to maximize our opportunities for growth.”
