Ross Stores to Raise Prices and Monitor Customer Impact Amid Tariff Regime

Ross Stores plans to raise prices and monitor customer impacts in response to the tariff regime implemented by President Donald Trump. The discount retailer operates 1,873 locations across the US and plans to open 90 new stores this year. Ross' sales increased by 2% year-over-year during Q2, driven by higher traffic and basket size, with prices up slightly due to the mix of goods.

Ross Dress for Less (ROST), a leading discount retailer, is preparing for a series of price increases to mitigate the impact of the ongoing tariff regime implemented by the Trump administration. The company, which operates 1,873 locations across the US, aims to offset the increased costs associated with tariffs and maintain its value proposition to customers.

In a recent earnings call, Ross Stores' Chief Operating Officer Michael Hartshorn hinted at potential price hikes, stating that the company would be cautious in deciding when and where to adjust prices. The company plans to monitor customer reactions closely and make area-by-area decisions based on market conditions [1].

Despite the expected price increases, Ross Stores reported a 2% year-over-year increase in comparable store sales during the second quarter, driven by higher traffic and basket size. However, the company's operating income dipped by approximately 3% year-over-year, mainly due to tariff-related costs [1].

To counteract the impact of tariffs and maintain profitability, Ross Stores is planning a series of "store refreshes." These efforts include cosmetic repairs, upgrades in signage, and the addition of more workers in stores. Additionally, the company is testing out self-checkout kiosks in high-volume locations, aiming to expand their use in the coming year [1].

Ross Stores' CEO James Conroy expressed confidence in the company's ability to manage the impact of tariffs, stating that the company has been working tirelessly to mitigate the effects on margins. The company expects modest pressure from tariffs during the third quarter but is optimistic that the situation will improve by the end of the year [1].

In response to the tariff regime, consumers have become more cautious about their spending. A recent report from market research company Wunderkind found that 58% of consumers feel cautious, pessimistic, or panicked about the economy, prompting 35% to search for more deals while shopping [1].

Ross Stores' stock has seen increased interest from analysts, with several firms raising their price targets. UBS Group, for instance, raised its price target for Ross Stores from $144.00 to $147.00, maintaining a "neutral" rating [2]. The company reported a Q2 EPS of $1.56, slightly above analysts' expectations, with revenues of $5.53 billion, a 4.6% increase year-over-year [2].

Ross Stores is expected to open 90 new stores this year, further expanding its footprint across the US. The company's ability to navigate the challenges posed by tariffs and maintain its value proposition to customers will be crucial for its continued success.

References:
[1] https://finance.yahoo.com/news/ross-stores-plans-harsh-change-033300108.html
[2] https://www.marketbeat.com/instant-alerts/ross-stores-nasdaqrost-price-target-raised-to-14700-2025-08-22/