Ross to Open 100 More Stores as Off-Pricers Bank on Brick and Mortar for Growth
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Despite retail’s broader push to go digital, Ross Stores has become the latest off-pricer to eschew e-commerce in favor of brick-and-mortar.
The discount chain announced today that it would open another roughly 100 stores — 75 locations under the namesake banner Ross Dress for Less and 25 dd’s Discounts outposts — in fiscal 2020. So far this year, it has debuted 19 Ross Dress for Less and seven dd’s Discount stores.
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“These recent openings reflect our ongoing plans to continue building our presence in both existing and newer markets, including the Midwest for Ross and expansion of dd’s Discounts into Indiana,” group EVP of property development Gregg McGillis said in a statement. He added that the retailer intends to expand to 2,400 Ross Dress for Less and 600 dd’s Discount locations — up from a combined 1,831 outposts across 39 states.
The announcement comes just days after rival off-price chain Burlington Stores said during its fourth-quarter conference call that it would cut back on its online presence. (E-commerce accounts for only about 0.5% of its total sales.) Ross, on the other hand, does not do business online; its website consists of a store locator and invites shoppers to share images of their finds to be featured on the homepage.
Last week, the Dublin, Calif.-based retailer logged earnings per share that climbed 7% to $1.28, versus predictions of $1.25, on profits of $456 million. Revenues also beat estimates, improving 7.45% to $4.4 billion, compared with consensus bets of $4.36 billion.
For the full year, Ross forecasts same-store sales growth of 1% to 2% and earnings per share of $4.67 to $4.88. The guidance, however, does not reflect “potential unknown impacts” from the escalating coronavirus outbreak.
Off-price has been a rare bright spot in the world brick-and-mortar retail in the past several years, which executives and analysts have credited in part to the treasure hunt experience it provides shoppers — something that, unlike traditional retail, can’t be easily replicated online. The model also allows the chains to be more flexible with inventory, and it leaves them far less vulnerable to macroeconomic headwinds.
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