‘Treasure hunting environment’ drives store sales

Ross stores aims to attract customers and drive sales by offering value and a “treasure hunting environment,” executives said Thursday (Nov. 21) during the off-price retailer’s quarterly earnings call.

By his Ross dress for less and dds discounts stores, which are largely focused on apparel and home goods, the company turns merchandise quickly by offering “the right items at the right value,” Ross Stores vice president and CEO Barbara Rentler said during the call.

“It’s really about the value you put on the floor, the products and the value,” Rentler said. “Then it turns around quickly because the customer knows in a treasure hunt environment, ‘If I don’t buy it, it won’t be there next week.'”

Ross Stores saw a 1% increase in comparable store sales in the quarter ended Nov. 2, while it saw a 3% increase in the nine months ended Nov. 2, according to a Thursday earnings release.

Rentler said the company was disappointed by the slowdown in sales gains in the quarter, but added that its earnings were better than expected due to a higher operating margin and lower costs for incentives, freight and distribution, according to the release.

She attributed Ross Stores’ slower sales growth to the high cost of necessities that continue to weigh on customers’ discretionary spending, severe weather from Hurricanes Helene and Milton and unusually warm weather, according to the release.

Rentler also said in the release that “we believe we should have done better on some of our merchandising initiatives.”

“I think we had some execution issues in a couple of businesses that we’ve identified that we think we can fix — it probably didn’t go as quickly as we should have in some things where there were, I would say, shifts in the world from a product perspective,” Rentler said on the call. “So I feel like that’s an opportunity, and we missed some volume there.”

Looking ahead, Ross Stores expects to see comparable store sales growth of 2% to 3% in the quarter ending Feb. 1, 2025, according to the earnings release.

“As you get into the fourth quarter, a lot of the businesses that are really important in the holiday season, whether it’s gifts or cosmetics, these companies have been strengths for us,” Rentler said on the call. “So as we go into that period, we’re going to some of our strongest businesses.”