Shop at Ross? Retailer says tariffs could increase prices
Add Ross Stores to the retailers expecting to raise some prices due to tariffs.
Ross Stores, which operates Ross Dress for Less and DD's Discounts, may be forced to raise prices on some products, executives said during the company's first quarter earnings call on May 22.
The retailer reported flat sales for the 13-week period ending May 3, compared to the same period a year ago. Net income of $479 million dipped nearly 2% from a year ago, but met expectations of analysts polled by S&P Global Market Intelligence.
Sales increased each month during the quarter, but the effects of inflation and tariffs and inflation loom over the coming weeks, CEO Jim Conroy said in comments in the earnings release. “Heightened macroeconomic and geopolitical uncertainty persists, most notably prolonged inflation and evolving trade policies," he said.
Ross Stores: 'Don't want to be the first one to raise prices'
Trade policies continue to shift. Earlier this month, President Donald Trump reached a U.S.-China agreement to lower tariff rates on trade for 90 days – cutting the tariffs on Chinese imports from 145% on most goods to 30% tariff, while China reduced tariffs on U.S. goods from 125% to 10%.
While Trump called on Walmart to "eat the tariffs," Ross Stores is among retailers including Walmart, Amazon, and Best Buy preparing customers for higher prices on some products. Half of the goods sold at its stores originate from China, Conroy said. "As such, we expect pressure on our profitability if tariffs remain at elevated levels," he said.
Like other retailers, Ross Stores is trying multiple strategies to "mitigate the cost" of tariffs, but expects consumers to begin feeling their impact in late June and early July, chief operating officer Michael Hartshorn told analysts during the earnings call, according to a transcript from S&P Global Market Intelligence.
In addition to finding products made in other countries, Ross Stores is working with suppliers to "get better costing, which we've done at this point, even in the second quarter," he said.
Lastly, the retailer can increase the price charged for products, "but we want to be very careful with price increases," Hartshorn said. "We don't want to be the first one to raise prices, and we want to make sure that we keep our value or pricing umbrella versus mainstream retail."
In the months ahead, this dilemma will be felt by consumers and retailers – many of which rely on goods from China, Conroy said. "At the end of the day, there's a lot of product, particularly over the next 6 months, that is going to be imported from China for us and for every other retailer and every other off-price company," he said.
Ross Stores projected flat to 3% sales during the current 13-week period ending Aug. 2, compared to a 4% increase a year ago.
Contributing: Kinsey Crowley, Margie Cullen, Kathryn Palmer
Mike Snider is a reporter on Paste BN’s Trending team. You can follow him on Threads, Bluesky, X and email him at mikegsnider & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com
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