Ross Stores 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.


“As announced earlier this month, Barbara will become our new Chief Executive Officer and a Member of the Board of Directors, effective June 1st.”

Weak sales growth, but nice earnings performance

“As mentioned earlier, we were able to maximize earnings during the first quarter, despite a modest 1% increase in same-store sales, which were impacted by unfavorable weather and a more challenging retail environment.”

Weather impacted the business, just like everyone else

“So like other retailers, the unfavorable weather impacted our business early in the quarter. As we mentioned in our release, sales improved in April as the weather improved and also with the Easter shift.”

JC Penney doing better clearly not helping

“Look, it’s certainly not a plus. It’s not — we try to quantify it when they weren’t doing as well and we had difficulty quantifying it, but we knew it was helping. So really the answer to your question is we really don’t have a precise answer.”

Our model can outlast a promotional environment

“we’ve lived through promotional and competitive periods before and we had — we are very confident we have a buying model and we have an expense structure that allows us to succeed in those environments and frankly to compete fairly sustainably. When other moderate retailers promote, it’s not necessarily sustainable for them to keep doing that.”

It’s hard to make money in e-commerce when your average unit retail price is low

“Secondly, e-commerce, so, we continue to look at e-commerce. We run a business that has a $10 average unit retail. And when we put together the economics currently, we think it’s very hard for people to make money. Not just shipping cost but return cost, processing cost, marketing cost etcetera.”

Our customer appears to be having problems right now

“We’re not economists. But what we know is the customer – the customer who is the moderate base customer appears to have some difficulties right now and so, if you’re — the word is health, they seem to have a little bit of a health problem right now.”

Retailers should never blame the weather

“I think the Midwest is a good case example of why retailers should never blame the weather. We mentioned the weather because obviously it was relevant in Q1. But when we look at the Midwest, there are lots of other things that can drive your top line certainly over the period of this quarter that can trump weather. And I think some of the changes that we’re able to make in terms of assortment certainly had that impact in the first quarter.”

“over the whole of the quarter. The changes you can make in assortments and values you can offer in the store can trump the weather impact”