Ross Stores responds to tariff concerns — Will prices go up?
Ross stores, the retail chain responsible for providing high-quality, low-priced apparel, footwear, and home items, may soon face an increase in prices. The 2,205 Ross Dress for Less and DD'S Discounts stores spread across 44 states are at the risk of rolling out higher prices and reduction of discounts for customers sometime in June or July due to tariff restrictions and other profitability threats being faced by the company, according to Merca.
During a recent earnings call to discuss the retail chain's performance in 2025's first quarter, CEO Jim Conroy said on May 22 that the company had suffered a 'slower start to the spring selling season'.
With inflation, changing consumer preferences, and a rise in Chinese tariffs, Conroy revealed that Ross is examining whether the company needs to up merchandise prices to deal with the blowback.
'As tariffs remain at elevated levels, we will be working to find the right combination of pricing versus merchandise margin compression. We believe we have several levers available to minimize the overall impact, but it is possible that we will see short-term pressure on our profitability,' he said.
Though a rise in prices could possibly be the only option on the table, COO Michael Hartshorn also clarified that this hike will be based on category and use of items. 'We want to be very careful with price increases,' said Hartshorn. '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. And that's a substantial value gap to make sure we're delivering the values that customers come to expect.'
In the first quarter earnings reports for 2025, the retailer revealed a 2% fall in net income this year to $479 million. While comparable store sales remained stagnant, a 2.7% year-over-year drop was reported in average customer visits per store. These numbers were reported in a climax of changing customer preferences that Conroy described as 'a shift towards more functional items versus discretionary items'.
President Trump's tariff war with China is also a matter of concern to the company since more than half of its cost-effective retail imports are sourced from the latter. 'The volatility of trade policies and the corresponding impact on the economy, the consumer, and our profitability is highly unpredictable,' said Conroy. 'We will focus on what we can control and manage the business conservatively.'
Trump has been engaged in a retaliatory tariff war with China ever since he first announced the new tariff imports on February 1. Currently, there is a 90-day pause on the new tariffs announced by both sides which steeped as high as 125%. The company is preparing in advance to face higher import taxes in 60 countries come July when the pause opens up.
Apart from considering a hike in pricing to break even, Ross is also looking into sourcing goods from other countries with little to no tariffs. Many other retailers such as Walmart, Nike, Shein, Adidas, Target, Best Buy, and Mattel have already announced a hike in prices for customers who are already preparing to deal with the financial blowback.
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