Ross Stores Reports Q3 Earnings, Expects Sales Growth Despite Economic Uncertainty

Ross Stores reported Q1 earnings, with sales growth expected for the rest of the year despite economic uncertainty. Consumers are seeking discounts, and retail prices are set to increase. Ross CEO Jim Conroy said consumers will seek "value" in the fall season.

Ross Stores Inc. (ROST) reported its Q1 earnings on July 2, 2025, with a focus on sales growth expected for the rest of the year despite ongoing economic uncertainty. The off-price retailer, which operates Ross Dress for Less and DD's Discounts, has positioned itself to capitalize on consumers' increasing demand for value-driven merchandise [1].

Ross Stores Chief Executive Jim Conroy stated that as retail prices are poised to increase, U.S. consumers will be seeking "value" in the fall season. The company's loyal customer base is expected to continue shopping at Ross Dress for Less and DD's Discounts stores, positioning Ross to maintain its competitive edge [1].

Ross Stores reported strong sales in May, with a noticeable softening in June, but a sharp rebound in July. The company's Q2 earnings of $1.56 per share on sales of $5.5 billion included a hit of about 11 cents per share from tariff-related costs. The $5.5 billion in quarterly sales was 5% higher than the $5.3 billion in the second quarter of 2024, with same-store sales rising 2% year over year [1].

The company expects same-store comparable sales growth of 2% to 3% in both its third and fourth quarters. This projection would translate to per-share earnings of $1.31 to $1.37 in the third quarter and $1.74 to $1.81 for the fourth quarter, respectively. Ross Stores remains somewhat cautious about the rest of the year due to macroeconomic uncertainty [1].

Ross's ability to navigate tariffs and inflation has been a key factor in its resilience. The company's disciplined merchandising, agile inventory strategies, and cost-control measures position it to outperform peers like TJX Companies (TJX) and Dollar Tree (DLTR) in the long term [1].

Ross Stores' stock has seen mixed performance this year, with a decline of about 4% compared to the S&P 500 index's gain of around 8%. Despite this, Ross's stock offers a compelling valuation with a P/E ratio of 14.5x, compared to 16.2x for TJX and 12.8x for Dollar Tree [1].

Ross Stores' strategic agility and focus on delivering high-quality, branded merchandise at compelling price points will be crucial in maintaining its competitive position and capturing market share in the face of increasing retail prices and economic uncertainty [1].

References:
[1] https://www.ainvest.com/news/ross-stores-navigating-tariffs-retail-uncertainty-strategic-resilience-2508/
[2] https://www.marketwatch.com/story/ross-stores-flash-another-sign-that-consumers-are-seeking-discounts-this-fall-3697b70f
[3] https://www.morningstar.com/news/marketwatch/20250821334/ross-stores-flash-another-sign-that-consumers-are-seeking-discounts-this-fall