Ross Stores, Inc. (NASDAQ:ROST) Q2 2023 Earnings Call Transcript

It’s not really a target or a level that we have in mind. It’s just how the customer responds and obviously, we want to put out the best possible values we always can. And so the merchants have that in mind and now they have really heightened awareness and the ability to chase goods has really given us an opportunity to perhaps accelerate some of those things. So again, it will continue. I don’t have the beginning or end amount. So we think you should ask because I think the customer will decide for us and our job and the merchant’s teams’ job is to respond to that and satisfy her in whatever level that is.

Operator: And the next question comes from the line of Alex Straton with Morgan Stanley. Please proceed with your question.

Alex Straton: Great, thanks for taking the question and congrats on a nice quarter. I wanted to talk about the competitive landscape. On our end, we’ve witnessed the rise of these low-price e-commerce players in recent years, like even Shein. So I’m just wondering like how maybe, Barbara, you think about those types of businesses what they mean for Ross or even how the competitive landscape has changed now versus a few years ago? Thanks a lot.

Barbara Rentler: Well, obviously Shein is doing a lot of business and they offer great value. We have our junior businesses is a pretty large business for us in ladies apparel, so I think that would be most comparable. I don’t think I can really compare myself to Shein. I think reality of it is to see is a lot more competition in that arena, whether it’s Shein, whether it’s Primark, whether it is. So I think it’s just our job to be able to offer assortments that satisfy the customer and again they are just like another competitor. In terms, if you think about all the competitors, right, department stores years ago had a lot more share. So that would have been a major competitor for us. I think I mean, you would know better than I would know, you’re watching the world evolve.

And different segments of the market are more challenging than others and so I think one of the best parts about being an off-price is that we have a unique opportunity to satisfy all types of customers. This is why we want the assortments to be broad. This is why we want to values to be strong, and everyone keeps asking about the trade-down customer. I think that just getting more customers is really by broadening your assortments and I think off-price has a unique opportunity to do that versus if I may in another particular segment. So the merchants obviously studies in, they study all the other retailers and their job is to understand what they offer and what we can offer and to give the best products and the best value that we can. And I think there has been, if we looked at this and have this discussion 10 years ago, it will be a very different discussion than where we are today.

So retailing is I think we probably all agree is dynamic. And so — but I do believe that off-price has this unique opportunity because it carries products and has the ability to flex based on the customer and you’re not kind of pigeon-holed into one view of who you are, you can flex and move with what the customer wants. So, I think the prices in the right place at the right time.

Operator: And the next question comes from the line of Ike Boruchow with Wells Fargo. Please proceed with your question.

Unidentified Analyst: Hi, everyone. This is Juliana on for Ike. Congrats on a good quarter. Maybe just a quick follow-up on AURs. Is the moderation we’re seeing they’re more result of mix-shift towards cosmetic and accessories for example, the first quarter and as we see home performance improving, do you see that driving an upside there? Thank you.