Ross Stores Continues to Add to Retail Line-up
Running a discount store chain is turning out to be very profitable these days.
While major department chains are shuttering stores and fighting to keep profits from tumbling, discount-store companies are in expansion mode.
During its recent first-quarter earnings call, Ross Stores Inc., based in Dublin, Calif., said it will be adding 100 locations for its Ross Dress for Less division and its dd’s Discounts division.
“Our store-expansion program is on schedule with the addition of 23 new Ross and six dd’s Discounts locations in the first quarter,” Barbara Rentler, chief executive officer, said on the May 24 first-quarter conference call with analysts and investors. “We remain on track to open a total of approximately 100 locations in 2018 comprised of 75 Ross and 25 dd’s Discounts.”
Showing its promising future, the discount apparel retailer rose in ranking on the 64th annual Fortune 500 list, which ranks the top 500 U.S. corporations.
Sixteen years after making its debut on the list, Ross Stores reached its highest ranking in the corporation’s history, being listed as No. 209 on the 2018 ranking, up from No. 219 last year.
The new position reflects Ross Stores’ ongoing growth. In 2017, the company had $14.1 billion in revenues, up nearly 10 percent from the previous year.
Competitors of the discount-apparel retailer also showed improvement on the Fortune 500 list, as Massachusetts-based TJX Companies—parent company of T.J. Maxx and Marshalls—rose from 87 to 85 and New Jersey’s Burlington Stores was listed at 459, up from 463.
In Ross Stores’ first-quarter earnings for the 13 weeks ending May 5, net income totaled $418 million compared with $321 million for the same period last year. First-quarter sales reached $3.6 billion, up 9 percent from the first quarter in 2017. Same-store sales for the quarter were up 3 percent over last year.
During the conference call, Ross Stores’ executives revealed that stores located near competitors showed no deviation in performance when compared with shops that have no immediate competition in their neighborhoods.
“We colocate about a third of our chain with either T.J. Maxx, Marshalls or Burlington, and those stores performed in line with the rest of the chain,” said Michael Hartshorn, who serves as the off-price retailer’s executive vice president and chief financial officer.
Currently, Ross Stores has 1,409 Ross Dress for Less locations and 213 dd’s Discounts locations.