Dive Brief:
- Ross Stores opened 18 stores from February through this week, the retailer said Monday. The company opened 11 Ross Dress for Less stores and seven DD’s Discounts in 11 states, part of a plan to open about 90 stores in 2024.
- The retailer expanded its presence in the newer markets of Michigan and New York, while DD’s growth focused on the existing markets of California, Florida, and Texas, Gregg McGillis, group executive vice president of property development, said in an announcement.
- Ross last week also reported its fourth-quarter and full-year earnings. For Q4, sales rose 15.5% to $6 billion, while comparable sales grew 7% from a year ago. For the full year, sales grew 9% to $20.4 billion, up from $18.7 billion a year ago. Net earnings also rose nearly 24% to $1.9 billion from $1.5 billion year over year.
Dive Insight:
Ross plans to continue its pace of adding about 100 new stores annually, but that number could fluctuate “depending on how DD's plays out beyond this,” Chief Operating Officer Michael Hartshorn said during a recent earnings call, according to a Seeking Alpha transcript. This year, the retailer’s openings include about 75 Ross stores and 15 DD’s Discounts. The California-based company operated 2,127 Ross and DD’s Discounts in 43 states, Washington, D.C. and Guam as of Monday.
“As we look out over the long term, we remain confident that Ross can grow to 2,900 locations and DD’s Discounts can become a chain of 700 stores given consumers' ongoing focus on value and convenience,” McGillis said.
Even as Ross looks to expand DD’s, the chain is facing some challenges in new markets. Sales trends at DD’s Discounts slightly trailed Ross' growth, CEO Barbara Rentler said during the earnings call. “While DD’s top-line results were respectable in fiscal 2023, we are disappointed with the performance in newer markets,” Rentler said.
As a result, Rentler said during the call that the company is “conducting an in-depth analysis of DD’s” to gain a better understanding of the banner’s customer base as it attempts to grow outside existing markets. In the interim, Rentler said the company plans to moderate DD’s growth near term in newer markets and focus on growing the banner in existing regions. DD’s Discounts is currently in 22 states. The banner’s offering is focused on a moderately-priced assortment of first-quality, seasonal name-brand apparel, footwear and home fashion.
While cosmetics, home and children’s performed well during the holiday selling season, Ross said inflation continues to affect consumers’ willingness and ability to spend on discretionary items. The company gave full-year guidance anticipating total sales will grow 2% to 4% in 2024, while comparable sales will increase 2% to 3%.
