Ross Stores: ‘Treasure Hunt Environment’ Drives Off-Price Store Sales
Ross Stores aims to draw customers and drive sales by offering value and a “treasure hunt environment,” executives said Thursday (Nov. 21) during the off-price retailer’s quarterly earnings call.
At its Ross Dress for Less and dd’s Discounts stores, which are largely focused on apparel and home goods, the company turns goods quickly by offering “the right goods at the right value,” Ross Stores Vice Chair and CEO Barbara Rentler said during the call.
“It’s really about the value you’re putting on the floor, the products and the value,” Rentler said. “Then it will turn quickly because the customer knows in a treasure hunt environment, ‘If I don’t buy it, it won’t be there next week.’”
Ross Stores saw a 1% gain in comparable store sales in the quarter that ended Nov. 2, while seeing a 3% gain in the nine months ended Nov. 2, according to a Thursday earnings release.
Rentler said the company was disappointed with the slowdown in sales gains during the quarter but added that its earnings were better than expected due to a higher operating margin and lower costs for incentives, freight and distribution, according to the release.
She attributed Ross Stores’ slower rate of sales growth to the high costs of necessities that continue to pressure customers’ discretionary spending, severe weather from Hurricanes Helene and Milton, and unseasonably warm weather, per the release.
Rentler also said in the release that “we believe we should have better executed some of our merchandising initiatives.”
“I think we had some execution issues in a couple of businesses that we’ve identified and that we think we can correct — didn’t probably move as quickly as we should have in some things where there were, I would say, shifts in the world from a product perspective,” Rentler said during the call. “So, I feel that’s an opportunity, and we missed some volume there.”
Looking ahead, Ross Stores expects to see comparable store sales growth of 2% to 3% in the quarter ending Feb. 1, 2025, according to the earnings release.
“As you get into the fourth quarter, many of the businesses that are really important during the holiday season, whether it’s gifting or cosmetics, those businesses have been strengths for us,” Rentler said during the call. “So, as we go into that period, we’re going to some of our strongest businesses.”
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