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A Ross store in San Francisco on Nov. 12, 2023. Company executives said they plan to open about 90 new stores this year.
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Washington
CNN
—
As Americans struggle with high inflation and interest rates, companies that offer great deals and essential products are reaping the benefits.
Just ask Ross Stores Inc. America’s largest discount retailer reported earnings and revenue last week that beat analysts’ expectations, and company executives said they plan to open about 90 new stores this year.
“Clearly there is a lot of uncertainty in the macro economy,” Adam Orbos, executive vice president and chief financial officer of Ross Stores, said in the earnings call. “The bright spot for our business is that customers are looking for value more than ever, and we are well positioned to deliver it.”
TJX, the parent company of TJ Maxx, Marshalls and HomeGoods, is also benefiting. The company recently reported strong earnings for its most recent quarter and is also planning to expand its brick-and-mortar stores. — It is sold in over 1,300 stores across North America, Europe and Australia.
And Dollar General last week reported sales that beat Wall Street expectations and increased foot traffic in the first quarter.
In contrast, luxury retailers such as Burberry have warned that spending on luxury goods is slowing across the board. The British luxury chain said last month that profits for the budget year that ended in March plunged 40 percent and that same-store sales in the Americas fell 12 percent from a year earlier. LVMH Moët Hennessy Louis Vuitton has reported a sharp drop in demand for premium liquor in the United States.
“We’re seeing consumers tightening up on their discretionary spending,” Clayton Allison, portfolio manager at Prime Capital Investment Advisors, told CNN.
Allison said a more cautious stance from U.S. consumers would benefit retailers selling groceries and other essentials.
Walmart, for example, posted better-than-expected profits for the first three months of the year, as the nation’s largest retailer said higher-income consumers were flocking to its stores in search of bargains.
“Customers are now being more careful about where they spend their money, which will provide a boost to essentials-centric retailers,” Allison added.
For years, restaurateurs have sent a confident message to investors: “We’re raising prices, but customers don’t mind.”
Well, now diners think so too, and fast-food chains in particular are quickly pivoting.
Frustrated diners have complained online about how expensive fast food has become, as lower-income consumers, especially, are eating out less often and spending less when they do. For some fast-food restaurants, that means slower sales and fewer customers.
To win back customers, these chains are turning back to a strategy they had previously abandoned: discounts.
Please see here for the detail.
Monday: GitLab Revenue. S&P Global and the Institute for Supply Management release their May business survey measuring economic activity in U.S. manufacturing.
Tuesday: CrowdStrike, Hewlett Packard Enterprise, and Bath & Body Works revenues. The U.S. Department of Labor releases April numbers on job openings, separations, hiring, and firings. The U.S. Department of Commerce releases April numbers on new orders for manufacturing goods.
Wednesday: Earnings for Lululemon, Dollar Tree, Brown-Forman, Campbell Soup and Five Below. Automatic Data Processing releases May employment report. Bank of Canada announces latest interest rate decision. S&P Global and the Institute for Supply Management release their May business survey, which gauges economic activity in the U.S. services sector.
Thursday: Revenues for Autodesk, J.M. Smucker Company, DocuSign, Vail Resorts, Zumiez, Big Lots, Conness, and Kirkland’s. European Central Bank announces latest interest rate decision. U.S. Department of Commerce releases April import and export data. U.S. Department of Labor reports new claims for unemployment benefits for the week ending June 1. China Customs releases May import and export data.
Friday: The U.S. Department of Labor released data for May showing the state of the labor market, including monthly employment growth, wage growth, and the unemployment rate.
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