Ross Stores is continuing its store growth strategy this year with a slate of new openings despite taking a slight hit in recent quarters due to higher freight, wages and COVID-related costs.
The off-price chain said on Monday that it has opened 22 Ross locations and eight DD’s Discounts stores in 15 different states and Guam in February and March.
Ross said in a statement that these new locations are part of the company’s plans to add approximately 100 new stores — 75 Ross and 25 DD’s Discounts — during fiscal 2022.
“Our return to stronger unit growth in 2022 reflects our belief that Ross can ultimately grow to 2,900 locations and DD’s Discounts can become a chain of 700 stores given consumers’ ongoing focus on value and convenience,” said Gregg McGillis, group EVP of property development, in a statement. “Our continued expansion of both chains also demonstrates our commitment to further building our presence in both existing and newer markets.”
McGillis stated that the company now has 1,952 total stores in 40 states, the District of Columbia and Guam. Ross stores account for 1,649 of these locations, while DD’s Discounts currently operates 303 stores in 21 states, the company said.
This store growth comes as the off-price sector has taken a hit in recent quarters due to supply chain challenges and pandemic-related closures. On March 1, Ross Stores reported revenues for Q4 2021 of $5 billion, with comparable-store sales up 9% versus the same period in 2019. Total sales for fiscal 2021 grew 18% to $18.9 billion, up from $16 billion in fiscal 2019, with comp-store sales up 13%.
“We achieved strong sales results in the fourth quarter despite the negative impact from both the surge in Omicron cases during the peak holiday selling period and continued supply chain congestion,” Barbara Rentler, CEO of Ross Stores, said at the time of the earnings release. “Fourth-quarter operating margin of 9.8% was down from 13.3% in 2019, mainly due to ongoing headwinds from higher freight, wages and COVID-related costs.”
Ross expects comps for fiscal 2022 to be flat to up 3% versus a 13% gain in fiscal 2021. Earnings per share for fiscal 2022 are projected to be $4.71 to $5.12, compared with $4.87 in the prior year.