Sales and profits of Ross Stores fall in the second quarter
Ross Stores Inc. felt the impact of inflation in the second quarter of fiscal 2022.
The off-price retailer reported sales for the Revenue for the second quarter of 2022 was $4.6 billion, down 4% from the prior year period ($4.8 billion). Same-store sales fell 7% in the second quarter of 2021, on top of a solid 15% increase in the first quarter of 2021. This was the strongest period of the previous year.
Earnings per share were $1.11, compared to $1.39 for the second quarter of fiscal 2022. Net income was $494 million, 22% lower than $385 million of dollars.
Second semester and updated 2022 budget orientation
Given the retailer’s first half results, as well as what it sees as an increasingly challenging and unpredictable macro landscape and a more promotional retail environment, Ross Stores is taking a more conservative outlook. for the rest of the year.
[Read more: Ross Stores scales back forecast after tough Q1]
The retailer now expects third-quarter same-store sales to fall 7% to 9.9%, compared to a 14% increase in the third quarter of fiscal 2021. are expected to fall 4% to 7%, compared to a 9% increase over the same period last year.
Earnings per share for the third quarter are expected to be $0.72 to $0.83, compared to $1.09 in the third quarter of fiscal 2022 and $1.04 to $1.21 in the fourth quarter. This is compared to $1.04 in the prior year period. Based on Fiscal 2022 first-half results and second-half guidance, earnings for Fiscal 2022 will be between $3.84 and $4.12, compared to $4.87 per share for Fiscal 2022. financial year 2021.
“We are disappointed with our sales results, which have been impacted by the growing inflationary pressures our customers are facing as well as an increasingly promotional retail environment,” said Barbara Rentler, CEO of Ross Stores. “Earnings exceeded our guidance range, primarily due to lower incentive costs resulting from the below-plan performance.
“We are facing a very challenging and uncertain macro-economic environment which we believe will continue to weigh on our clients’ discretionary spending,” Rentler said. “While 2022 will likely remain a challenging year for our business, we believe our value-driven business model and strong financial position will allow us to manage these economic pressures and rebound over time.”
Ross Stores expands into new markets
Ross Stores has been busy opening new locations in new areas despite a tough market. The The retailer opened 21 Ross Dress for Less stores and eight dd’s Discounts stores in 12 different states in June and July. Openings included locations in the company’s largest markets of California, Florida and Texas, as well as newer states including North Carolina for dd’s and Ohio for Ross.
As of July 2022, Ross was firmly on track with plans to open 100 new locations – 75 Ross stores and 25 dd’s Discounts – in fiscal 2022 as part of its broader long-term growth target.