Ross Stores Scrap Annual Forecasts Amid Tariff Pressures
– The discount retailer Ross Stores announced on Thursday that it had withdrawn its financial projections for fiscal year 2025. They also stated that tariffs might negatively impact their profit margins this year, causing their stock price to drop by 11% after market hours.
The economic unpredictability caused by U.S. President Donald Trump’s tariffs, coupled with persistently high inflation, has led numerous businesses focused on consumers, specifically those in footwear, clothing, and household items, to reduce or retract their yearly objectives.
Ross Stores mentioned that over fifty percent of the products they sell come from China, and they might increase certain prices due to ongoing inflationary pressures within the retail sector, according to statements made during their post-earnings conference call.
“Trade policy fluctuations and their effect on the economy, consumers, and our profits are extremely hard to predict. Amid this uncertainty, we’ll concentrate on areas within our control and operate the business cautiously,” stated Jim Conroy, CEO of Ross Stores.
Ross Stores anticipates that their second-quarter earnings will fall between $1.40 and $1.55 per share, with this figure incorporating an estimated tariff-related expense of $0.11 to $0.16 per share due to imposed duties.
According to data compiled by LSEG, analysts were anticipating second-quarter earnings per share of $1.65.
In the first quarter, the corporation’s sales climbed to $4.98 billion, surpassing predictions of $4.97 billion, and the earnings per share at $1.47 exceeded forecasts as well.
Walmart, seen as an indicator for retail trends, announced earlier this month that it plans to increase prices due to the implementation of Trump’s tariffs. Meanwhile, Target revised downward its financial projections for the year.
In contrast, Ross Stores’ competitor in the discount retail sector and the parent company of TJ Maxx, TJX Companies, upheld its yearly objectives for both sales increase and profitability. This assumption is based on their strategy to mitigate the effects of tariffs yielding positive outcomes.
(Reported by Juveria Tabassum in Bengaluru; Edited by Alan Barona)