Ross Stores CEO Bets on Higher Prices After Record Sales Surge

Ross Stores just posted its strongest quarter in four decades. Comparable sales jumped 17 percent. Total revenue climbed 21 percent to $6 billion. Earnings per share hit $2.02, beating guidance by a wide margin. Customer traffic drove the gains. Shoppers came more often, spent more per trip, and came from every age group and income bracket.

Yet Jim Conroy, the company’s chief executive, isn’t simply celebrating. He is doubling down on a shift that could test the loyalty of the very bargain hunters who fueled this run. The off-price retailer plans to push higher-priced goods into its stores and raise some retails where margins have slipped. The move comes as Ross continues to grab share from department stores and other mainstream players. But it carries risk. Price-sensitive consumers already feel squeezed.

Conroy laid out the thinking during the May 22 earnings call. “I think if we had a learning coming out of the quarter, it is that we probably have the ability to push for some either higher-priced goods or potentially taking some retails up,” he said, according to a report from The Street. He added that in categories where margins erode, the company can increase average unit retail “a little bit to recapture some of that.”

Short, blunt assessment. The data supports it. Ross saw broad gains across ladies’, shoes, cosmetics and home. Younger shoppers aged 18 to 34 showed up in larger numbers. Traffic rose. Transactions rose. The customer base expanded across ethnicities and income levels. “We are very comfortable saying that we have seen growth, very broad-based across income demographics and age demographics, including 18- to 34-year-old customers,” Conroy noted in the same call.

Ross turns pricing power into market share gains while rivals struggle

And yet the strategy isn’t without pushback. Off-price retailers have thrived because they offer 20 to 60 percent discounts off department-store prices every day. Raise those prices even modestly and some shoppers may walk. Recent surveys show 57 percent of consumers believe they pay too much for apparel already, while 74 percent plan to cut back on clothing, shoes and accessories. Ross itself flagged tariff pressures in earlier quarters. Last year it withdrew full-year guidance amid uncertainty over import costs. The company has worked with vendors to blunt the impact, but higher goods costs remain a factor.

Still, Conroy sounds convinced the moment favors boldness. In the official release from Ross Stores investor relations, he said the first quarter delivered “outstanding sales and earnings results” with “superb execution” on the spring assortment. Traffic was the primary driver, helped by compelling merchandise, marketing that lifted acquisition, and a better in-store experience. Tax refunds gave spending an extra lift. “Our customer KPIs are unbelievable,” he told analysts. “More customers shopping more frequently and spending more on each trip.”

The numbers back the confidence. Net income reached $650 million, up from $479 million a year earlier. Operating margin hit 13.4 percent, well above the planned range. Ross now expects full-year comparable sales growth of 6 to 7 percent, up from a prior 3 to 4 percent outlook. Earnings per share guidance rose to $7.50 to $7.74. For the second quarter, comps should rise 6 to 7 percent with EPS between $1.85 and $1.93.

But. Execution will matter. Ross has spent years refining its buying model to secure name-brand goods at deep discounts. Expanding into higher price points requires buyers to source better items without losing the treasure-hunt feel that defines the stores. Self-checkout pilots are underway too, part of broader efforts to improve the experience. Early results look promising. Yet any friction at checkout or perception of fewer bargains could erode the traffic gains that delivered the 17 percent comp increase.

Investors have taken notice. Shares jumped nearly 7 percent after the report, according to real-time reaction tracked on X. Analysts highlighted the record comp performance and raised full-year outlook as signs the off-price model retains strong tailwinds even in a high-cost environment. One recent analysis in The Wall Street Journal noted that discount chains continue to pull shoppers away from traditional retail as value remains top of mind.

Conroy joined Ross in late 2024 as CEO-elect and took the top job at the start of fiscal 2025. He arrived with a track record from Boot Barn and a mandate to accelerate growth. The company now operates more than 2,280 stores. Plans call for 110 openings this year. Long-term targets sit at 2,900 Ross locations and 700 dd’s Discounts stores. New markets, including New York metro and Puerto Rico, have already been added.

The bet feels calculated. Ross has posted multiple quarters of strong traffic and transaction growth. It took market share from department stores in the fourth quarter of 2025 as well, when comps rose 9 percent. “I think the share shift is more from mainstream retail, department stores and other places like that, to off-price in general,” Conroy said in March, per coverage in PYMNTS. The company wants its fair share, or more.

So far the formula works. Higher customer counts. More frequent visits. Bigger baskets. The question is whether those shoppers will tolerate slightly less aggressive discounts in the name of better merchandise and healthier margins. Conroy believes the data says yes. “We have to ensure that we are in stock with sort of the best bargains across price points, but certainly the good price points,” he explained.

Retail history offers mixed lessons. Some chains expanded price points successfully and kept their core customers. Others watched traffic slip when the bargain perception faded. Ross holds advantages. Its model depends on opportunistic buying rather than fixed wholesale contracts. That flexibility lets buyers chase better brands or negotiate harder when costs rise. Marketing has improved customer acquisition. Store experience upgrades appear to be landing.

Tariffs still loom. The company flagged potential cost pressures in its forward-looking statements. Yet it raised guidance anyway. That tells investors management sees demand strong enough to absorb some inflation. Shoppers hunted deals through previous rounds of price hikes. They may do so again.

Ross isn’t alone. TJX Cos., its larger rival, has maintained its own outlook despite similar industry pressures. Burlington and other off-price names show comparable resilience. The segment benefits when consumers feel economic strain. Persistent inflation keeps that strain alive.

Conroy’s tone stays measured. He points to execution, momentum and disciplined buying. No grand claims. Just results and a plan to build on them. The higher-price test will unfold gradually. Early reads from the current quarter will matter. If traffic holds and baskets continue to grow, the strategy will look smart. If not, Ross may have to pull back.

Either way, the off-price leader enters this next phase from a position of strength. Record comps. Raised outlook. Growing store base. Broad customer appeal. The CEO who just delivered the best quarter in 40 years now asks whether his shoppers will pay a bit more for even better finds. The answer will shape Ross’s growth for years ahead.