Ross Stores, which also operates dd’s Discounts, is planning a bold in-store change as it benefits from heightened consumer demand.
The off-price retailer saw its comparable store sales increase by 10% year over year in the second quarter of this year, according to its latest earnings report. Also, its operating profits reached $1.1 billion, up by almost 73% from the previous year.
A recent Placer.ai report revealed that foot traffic at Ross Dress for Less locations spiked by 16.4% year over year, while traffic at dd’s Discounts climbed by 8.4%.
“Off-price continues to thrive, with Ross leading the way in the first half of 2026,” said Ephraim Fruchter, insights content writer at Placer.ai, in the report. “And with household budgets still under pressure, consumers appear to be rewarding retailers that stretch their dollars furthest.”
Ross plans to raise prices in stores
As Ross sees more consumers flock to its stores, it has grown more comfortable in rolling out price increases, a change that shoppers will soon notice.
During an earnings call on Aug. 20, Ross Stores CEO Jim Conroy said the company plans to implement AUR increases later this year. AUR (average unit retail) is the average selling price of a product within a specific time period.
“For the back half of the year, you will likely see some very modest AUR increases, sort of at the same sort of levels that we are seeing now, low single digit,” said Conroy. “And we really want to be there for a customer that is battling higher gas prices and all the other inflation pressures that they have in their life.”
Related: Ross Stores CEO doubles down on change that may deter customers
He said that he likes “the consistency” of the company’s current pricing strategy.
“I think as it stands, if we were to do some competitive price shopping, we would look very competitive,” he added.
Conroy first teased this change on an earnings call in March, when he said that Ross had “gained some confidence” in introducing higher price points in its stores.
“We probably have the ability to push for some either higher-priced goods or potentially taking some retails up,” said Conroy during the call in March.
He later doubled down on this change on another earnings call in May, saying the company is looking for “more opportunities” to “stretch” its prices.
Ross doesn’t plan to use tariff refunds to cut prices
In addition to implementing “very modest” price hikes, Conroy said that Ross won’t prioritize using tariff refunds to lower in-store prices, unlike other retailers such as Walmart and Target. In the second quarter, Ross received $253 million in tariff refunds.
“If you were to retroactively go back through the last four quarters, we were very hesitant to pass through AUR increases,” said Conroy. “So much so that we called out some impact to our earnings when tariffs first came to bear last year. So I think a lot of other retailers took a different position in trying to pass that along and may be now sort of reversing course.”
Last year, Ross raised prices in its stores in June and July in response to tariffs. The retailer continued implementing tariff-related price hikes towards the end of 2025, which had the greatest impact on its home category in the fourth quarter.
Conroy said that the company has “tried to maintain a little bit more stability” in “today’s inflationary economy,” emphasizing that it wants to continue offering the best values to customers.
“If we were to see something where we didn’t have that price umbrella under mainstream retail, we would make a change,” said Conroy. “But I think we are still safe where we are now.”
Why Ross risks frustrating price-conscious customers
The upcoming price increases from Ross come as more Americans are pulling back their spending amid economic pressures such as inflation, a lack of housing affordability, and, more recently, high gas prices.
According to recent American Automobile Association (AAA) data, the current national average gas price is about $4.09 per gallon, up from $3.20 one year ago.
In March, Forrester Research retail analyst Sucharita Kodali warned in an interview with Yahoo Finance that higher gas prices will push some consumers to cut their discretionary purchases.
“Anytime you have higher gas prices, it’s going to affect both supply and demand because the consumer is going to be pinched in their discretionary spend,” said Kodali. “You are going to see sectors like apparel, toys, sporting goods may suffer. You’ll still see the essential goods continuing to be resilient.”
This reality has become more apparent as a recent survey from Bread Financial revealed that 65% of Americans are taking measures to reduce their overall spending as fuel costs rise.
Roughly 32% are shopping less at physical stores to save money, while 61% are focusing more on purchasing needs rather than wants. Also, 43% are cutting back on nonessential purchases overall.
Ross has high hopes for future sales
Despite Ross’ risky move to raise prices in stores as consumers grow more sensitive to higher costs, it is confident that its sales will grow throughout the rest of the year.
The company raised its fiscal 2026 outlook, now expecting comparable store sales to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter.
The decision follows a shift in customer behavior that has given Ross a more optimistic outlook on its future performance.
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“During the quarter (second quarter), we saw gains from new and lapsed customers, along with more frequent trips and higher spending from existing customers, reflecting deeper engagement with both of our chains,” said Conroy.
“Importantly, the new customers we are attracting span a broad range of income demographics and age cohorts, including younger shoppers, which we believe reflects the broad appeal of our brand and the success of our marketing efforts in reaching and engaging a diverse customer base.”
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