Ross Stores has provided a business update in response to the impact of COVID-19 on the company’s operations.
While February sales were ahead of its expectations, the company said it 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. Additional store closures are expected.
As a result of this period of uncertainty, including the unknown duration and overall impact on consumer demand, the company said it is withdrawing its first quarter and 2020 full year sales and earnings guidance issued on March 3, 2020. To preserve financial liquidity, and out of an abundance of caution, management is also temporarily suspending the company’s stock repurchase program and is drawing down $800 million 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.
Barbara Rentler, CEO, 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. We will continue to monitor ongoing developments and respond accordingly.”
Update: Ross Stores will now temporarily close all Ross Dress for Less and DD’s Discounts locations throughout the United States effective March 20, 2020 through April 3, 2020.