Ross Stores' performance has increased, sales of household products have exceeded expectations, and it is actively seeking more brand cooperation

Ross Stores' performance has increased, sales of household products have exceeded expectations, and it is actively seeking more brand cooperation

In the recently announced financial report for the first quarter of this fiscal year, Ross Stores Inc. showed solid performance and revealed that the company is expanding its supply of goods and actively seeking cooperation with more cost-effective brands to further increase profit margins.

In the first fiscal quarter ended May 4, Ross Stores sales reached $4.9 billion, an increase of 8%, and comparable same-store sales climbed 3%. The sales growth in this quarter was mainly due to the significant increase in store traffic. At the same time, the average customer consumption also increased slightly.

Among many product categories, accessories and children's products have become the most popular areas among consumers, while home furnishings have also exceeded the company's expectations. Still, CEO Barbara Rentler thinks home furnishings should do better. "While some parts of our home furnishings business are performing better, we still believe there is significant growth opportunity in the home furnishings business given its market size," she said.

It is worth mentioning that the sales growth of the company’s dd’s Discounts chain store in the first quarter even exceeded that of the main brand store Ross Dress for Less. The company pointed out in March this year that the performance of dd’s Discounts in newly developed markets fell short of expectations and has launched an in-depth study to better understand which products can reach consumers in these markets.

dd’s Discounts’ performance was partly due to easier market conditions in the first quarter compared with the same period last year. However, according to group president and chief operating officer Michael Hartshorn, customers have also responded positively to the increased value of the company's products. "We are only in the early stages of adapting our merchandise to improve product value," he said. "While we are encouraged by the initial feedback from our customers, it is still a very early stage."

This quarter, Ross Stores' net profit increased by nearly 32% to $488 million, with diluted earnings per share of $1.46, which exceeded market expectations. In response, the company raised its profit forecast for the entire fiscal year, and now expects earnings per share to be between $5.79 and $5.98, a significant increase from last year's $5.56. At the same time, the company maintains its forecast for full-year revenue growth in the range of 2% to 3%.

Despite the stellar performance, company management was very calm about market performance, pointing out that low- and middle-income consumers are still under pressure. To this end, Ross is strictly managing inventory and trying to convert the savings in commodity purchase costs into benefits for customers. Barbara Rentler emphasized: "In the current macroeconomic and geopolitical environment full of uncertainties, including continued inflation, the purchasing power of our low- and middle-income customers is constantly being squeezed. Therefore, it is important to provide customers with cost-effective products. It’s more critical than ever.”