Ross stores don’t feel like bargain hunting
Shoppers’ inflation-fueled quest to maximize every dollar clearly hasn’t helped discount fashion retailer Ross Stores, which saw its stock plummet nearly 25% early Friday (May 20) following… a first-quarter earnings report filled with missed targets and revised future guidance.
Sales at Ross fell about 5% to $4.3 million for the three months ending April 30, the company said in a statement. Press releaseadding that its inventory levels also rose nearly 60% for the quarter.
“We are disappointed with our first quarter results below expectations,” Chief Executive Barbara Rentler said in the company’s press release Thursday, May 19. “After a stronger than expected start to the period, sales underperformed for the remainder of the quarter.
“We knew fiscal 2022 would be a difficult year to forecast, especially the first half when we were faced with record levels of government stimulus from last year and significant pent-up customer demand as COVID restrictions eased. relaxed. The external environment has also proven to be extremely challenging, as the Russian-Ukrainian conflict has exacerbated inflationary pressures on the consumer not seen in 40 years,” she said.
Related: Deep Discounter Ollie’s Says “Trading Effect Will Be Available Soon” For Consumers
Ross’ performance in the first quarter shows that not all retailers are feeling the “lower trade effect” that discount retailer Ollie’s said in March would come with escalating inflation rates.
“I don’t think we’ve seen the lower trading effect hit us yet, but I definitely have a feeling it’s coming very soon,” Ollie CEO John Swygert told analysts during the call. the company’s fourth quarter earnings call.
Although 80% of its sales come from the 12.6 million repeat customers who belong to its Ollie’s Army loyalty program, consumers who have never shopped at a bargain warehouse before will have 45 new places to shop. to do this year, as the company moves forward with a plan to rapidly open new stores en route to 1,050 locations.
It’s not just consumers looking for bargains, Swygert said — the current economic climate of supply chain constraints and rising costs is also prompting companies to offload their odd lots and details. at an unprecedented rate.