Ross Stores Whipsawed by Virus With 2Q Sales Down by 33%
August 20 2020 - 4:51PM
Dow Jones News
By Micah Maidenberg
Ross Stores Inc. warned of challenges tied to the pandemic ahead
as it reported weaker sales for its latest quarter, the latest
example of a retail chain that shut stores due to the coronavirus
struggling to get back to higher levels of demand after reopening
locations.
Ross, which runs Ross Dress for Less and DD's Discounts stores,
on Thursday said it generated $2.68 billion in sales for its
fiscal-second quarter, which ended Aug. 1. Sales were down 33% from
the comparable period last year but ahead of the $2.51 billion that
analysts expected, according to FactSet.
The pandemic has showcased divides across the retail sector.
Companies selling food and staples used at home, like Walmart Inc.
and Target Corp., have gained ground, staying open throughout the
crisis and reaching more shoppers with e-commerce operations.
But other chains that shut their stores as nonessential
businesses earlier this year have struggled. TJX Cos., the parent
of T.J. Maxx and other stores, saw quarterly sales fall by almost
one-third, while L Brands Inc., the parent of Victoria's Secret and
Bath & Body Works, said sales were down 20%.
Ross reported a quarterly profit of $22 million, or 6 cents a
share, compared with earnings of $412.7 million, or $1.14 cents a
share, a year earlier.
Analysts expected a loss of 25 cents a share, or 28 cents a
share following adjustments.
Dublin, Calif.-based Ross said it had reopened "vast majority of
its retail locations open and operating by the end of June."
During the initial phase of store reopenings started in May,
sales were ahead of its plans due to pent-up demand among consumers
and Ross's move to aggressively mark down older products to clear
inventory, Chief Executive Barbara Rentler said.
"In the weeks thereafter, trends were negatively impacted from
depleted store inventory levels while we were ramping up our buying
and distribution capabilities," she said in a statement.
Comparable sales dropped 12% for reopened stores from the date
they opened their doors again to the end of the company's latest
quarter.
Ross has seen comparable sales for the first two and a half
weeks of its fiscal third quarter "down mid-teens versus last year.
There remains significant uncertainty on how the pandemic will
continue to evolve and affect consumer demand and the economy, and
the potential exists for additional government mandated shutdowns
if Covid-19 cases remain elevated or further increase," Ms. Rentler
said.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
August 20, 2020 16:36 ET (20:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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