Ross Stores forecasts annual sales, profit below estimates on weaker demand

(Reuters) -Discount retailer Ross Stores forecast annual sales and profit below estimates on Tuesday, joining its larger peers in indicating a dip in consumer demand due to rising inflationary pressures.

U.S. consumer spending saw its first decline in nearly two years this January, with marked slumps in sales at furniture, clothing and electronic retailers. Forecasts warn of further drops, as tariff impositions and immigration crackdowns loom.

Ross Stores' efforts to diversify its product assortment with varying price points to attract more customers fell short, as its core customer base, primarily consisting of lower-to-middle income households, scaled back on expenses.

"We believe a combination of unseasonable weather and heightened volatility in the macroeconomic and geopolitical environments has negatively impacted customer traffic," said CEO Jim Conroy.

Peer TJX and retail giants such as Walmart and Target also provided bleak annual forecasts, as they expect consumer spending to be pressured by the impact of President Donald Trump's import tariffs.

Ross Stores expects fiscal 2025 comparable sales to be down 1% to up 2%. Analysts were expecting a rise of 2.9%, according to data compiled by LSEG.

The company forecast annual earnings per share in the range of $5.95 to $6.55, compared with expectations of $6.69 per share.

Ross Stores expects first-quarter comparable sales to be down 3%, compared with a 3% gain a year ago, including some impact on goods in transit when the initial tariffs were first announced.

The company's fourth-quarter sales fell 1.8% to $5.91 billion from the previous year. Analysts were expecting a 1.1% drop to $5.96 billion.

It earned a profit of $1.79 per share in the reported quarter, compared with estimates of $1.66 per share.

(Reporting by Aamir Sohail and Anuja Bharat Mistry in Bengaluru; Editing by Mohammed Safi Shamsi)