The department store, Ross Dress for Less is facing new problems that could soon lead to price hike in its stores. Ross Stores reported its Q1 earnings report for 2025 the sales are flat compared to the same time last year, and there is a drop of nearly 2% in net income to $479 million.
This growing problem that Ross Stores is forcing is something that may hit customers. Though there has been a decline in the average customer visits per location which has dropped by 2.7% year-over-year during the quarter.
Ross Stores profit decline
Reiterating the slow start to the year Ross Stores has withdrawn its full-year outlook as tariffs are expected to drag on earnings. As per the report the decline in profit to $479.2 million, in the quarter ended in May, compared with $488.0 million, a year earlier. As per the analysts polled by FactSet expected earnings per share was to be $1.43.
Though the revenue rose 3%, to $4.98 billion. Analysts surveyed by FactSet forecast revenue of $4.96 billion.
Ross CEO on price increase
As per Ross’s CEO Jim Conroy, on price increase during an earnings call on May 22, the company’s performance was off to a “slower start to the spring selling season in February.” He also highlighted that “prolonged inflation” has impacted its core customer and how they shop in stores.
“In terms of customer behavior, perhaps you could say there’s a little bit of a shift towards more functional items versus discretionary items,” said Conroy during the call.
Ross Stores impacted by tariffs
Ross’s CEO warned that tariffs are starting to become a major threat. The Dublin, Calif., company withdrew its previous full-year sales and earnings guidance due to uncertainty from tariffs. The company expects tariffs to pressure its profitability if they remain at elevated levels, as per the CEO.
“The volatility of trade policies and the corresponding impact on the economy, the consumer, and our profitability is highly unpredictable,” said Conroy in the earnings report. “During these uncertain times, we will focus on what we can control and manage the business conservatively.”
Dress for more is the new tag line for Ross’s customers
During the earnings call, Conroy said that Ross will be going down the shaky path of adjusting its prices, especially since over 50% of the goods it sells are sourced from China, one of the countries on which Trump imposed high tariff rates.
As per the company Ross Stores new policies will start around June and July this year.
Ross Stores price hike to cushion the impact of tariff
While Ross considers price increases as one way to lessen the impact of tariffs, it will also negotiate with suppliers on the cost of importing goods and seek other countries from which to source its products, a change that will take months to navigate.
As tariffs loom, consumers across the country are already planning to shift their spending habits as they anticipate paying higher prices for goods.
