Ross Stores stock plummets as a retailer linked the sector to a 2008 recession as a result of the Q1 figures falling

Ross Stores stock plummets as a retailer linked the sector to a 2008 recession as a result of the Q1 ...

Ross Stores (ROST) - Get Ross Stores, Inc. Reportshares fell Friday as the budget-focused retailer became the latest victim of sector sentiment after a weaker-than-expected April quarter that one of its executives compared to the so-called "great recession" of 2008.

Ross Stores, which operates the ''Dress for Less'' and ''dd''s Discounts'' brands, posted first quarter sales of $4.3 billion, missing Street expectations, and cautioned that same-store sales for the three months ending in July would likely decrease by as much as 6% when compared to last year''s tally, supported by post-pandemic stimulus.

Ross Stores reported a net income of $338 million, compared to 97 cents per share, about three cents shy of the Street consensus forecast.

According to the company, full-year sales are expected to decline, but rising input costs will likely add to the margin pressures that retailers around the country are experiencing, lowering profits from the year 2023.

Target (TGT) - Get Target Corporation Reportand Walmart (WMT) - Get Walmart Inc. The report says rising gasoline and labor costs, as well as untimed inventory builds, will increase near-term profit margins.

This week, the country''s two largest retailers experienced their biggest single-day losses, with Target losing about a quarter of its value in the massacre.

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President of Ross Stores'' group said the impact of higher food and fuel costs on consumers is reducing discretionary budgets, stating that today''s pullback would be 2008, "when the decline was very difficult, and we started to see some improvement in the first half of 2009."

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"We expected 2022 would be a difficult year to anticipate," said CEO Barbara Rentler of last year''s record levels of government stimulus and significant customer pent-up demand. "The external environment has also been extremely challenging as the Russia-Ukraine conflict has exacerbated inflationary pressures on the consumer. As a result of these factors, our first quarter results were lower than we expected.

Ross Stores'' stock was marked 23.15% lower in premarket trading, indicating a $71.25 price per opening bell.

Retail sales growth in the United States remained constant in April, according to data from the Commerce Department earlier this week, as record high gas prices and rising inflation failed to deter spending in the world''s largest economy.

Despite the heavy April reading, the Commerce Department''s headline index lowered from a 40-year high to 8.1 percent, with so-called core inflation, which eliminates volatile components, including food and energy prices, rising 6.2 percent, reaching the highest level since February 1991.

"But I would say the customer''s health is being squeezed to full, as is food and fuel prices, which is because of inflation. They have less to spend on discretionary items," Hartshorn said.

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