- Ross Stores second quarter sales grew nearly 6.5% year over year to nearly $4 billion as comparable-store sales rose 3%, against a tough comparison of 5% a year ago, the company said in a press release.
- Net earnings grew 6% to $412.7 million in Q2.
- The off-price retailer opened a net of 27 stores between the end of Q1 and Q2. The company was on track to open 22 Ross and six dd's Discount stores in the quarter, with plans to add a total of about 100 this year, including 75 Ross locations, executives said Thursday.
In a statement, Ross CEO Barbara Rentler called Ross' sales and profit increases "respectable," as operating margin (13.7%) came in ahead of the company's expectations. She did note, though, that the retailer's women's business trailed, though added that "trends in this important area showed some improvement during the period."
Morningstar analyst Zain Akbari said in a Thursday note that Ross' ladies unit "still needs time to recover from assortment missteps earlier this year." However, he added, "Ross' rapidly changing inventory allows for greater flexibility than conventional clothiers enjoy, mitigating risk while drawing bargain hunters."
Rentler told analysts Thursday that during Q2 its men's merchandise led the chain, while the Midwest and Southeast were its best performing markets, according to a Seeking Alpha transcript. She added that in women's apparel her team still has "a way to go until we're satisfied with our assortments in this important area." To that end, the company is working on merchandising initiatives in the category for the fall.
Looming tariff increases are likely to add uncertainty, but historically off-price has benefited, Rentler said, adding that Ross plans to hold its prices steady until it becomes clearer what other apparel sellers do. "[T]he most important thing, while all of this is going on, is that we offer our customers the best values possible."
MKM Partners analyst Roxanne Meyer said in a note emailed to Retail Dive Friday that "we look for [Ross] to be a beneficiary of tariffs (given industry disruption), ongoing department store weakness and consolidation, and a winner in a recession scenario."