- Prachi Singh |
In a business update in response to COVID-19 impact, Ross Stores, Inc. has said in a statement that while February sales were ahead of its expectations, the company has experienced a broad-based deceleration in sales trends over the past week from the continued spread of the virus throughout the country and the mandatory closure of stores in certain markets. Further, the company expects additional store closures.
Commenting on the update, Barbara Rentler, Chief Executive Officer of Ross Stores, said: “I want to emphasize that our company began 2020 in a strong financial position. We are proactively taking these early actions to further increase our liquidity and flexibility to successfully manage through these challenging times.”
As a result of this unprecedented period of uncertainty, including the unknown duration and overall impact on consumer demand, the company is withdrawing its first quarter and 2020 full year sales and earnings guidance issued on March 3, 2020. For the 52 weeks ending January 30, 2021, the company expected same store sales growth of 1 percent to 2 percent and earnings per share of 4.67 dollars to 4.88 dollars and comparable store sales to be up 1 percent to 2 percent with earnings per share of 1.16 dollars to 1.21 dollars for the first quarter.
Also to preserve financial liquidity, and out of an abundance of caution, the company’s management has decided to temporarily suspend the stock repurchase program and is drawing down 800 million dollars under its revolving credit facility to add to its cash balances. In addition, the company is currently reducing its capital expenditure and expense plans as well as aligning inventory positions with current sales trends in the business.