Dublin, Calif. – Ross Stores is still getting its arms around inflationary price adjustments that won’t turn off customers.
The off-pricer is experimenting with higher retails and will fine-tune as it gets a better sense of what mainstream retailers are doing with their AURs, CEO Barbara Rentler told analysts during yesterday evening’s quarterly call.
“In some cases, it’s been absolutely fine. And in some cases, not quite as fine,” she said.
Other key takeaways from the call:
Inventory position: Home merchandise is the hardest hit by port congestion, with delays running about six weeks. That aside, overall inventory is in good shape, according to Michael Hartshorn, group president and chief operating officer. Ross ended the quarter with average inventories down roughly 1%, which was on plan, he said.
Closeout opportunities: Ross is bullish on pack away prospects for next year’s Q3 and Q4, anticipating full-price retailers will cancelled seasonal goods that arrive too late to make it to the selling floor. Rentler also noted that vendors have grown more aggressive about placing goods for spring 2022 in pursuit of market share gain. “It’s a good time to be a buyer,” she said.
Expansion: The company recently completed this year’s store opening slate of 65 stores. It expects to return to its normal pace of 100 store openings per year in 2022.
The retailer’s third quarter sales and profits beat expectations. Sales for the quarter ended Oct. 30, 19% to $4.6 billion. Comp climbed 14% as the growth in average units per basket off-set a slight decline in traffic. Net income was $385 million, nearly triple last year’s $131 million and was up 4.1% from $271 million in 2019.
Year-to-date, sales were up 20% to $13.9 billion, with comp up 14%. Net income was $1.36 billion compared to a net loss of $152.6 million last year. Net income was up 13.3% over 2019’s net income of $1.20 billion.