Annual performance guidance for Ross Stores, Inc. (ROST.US) is bleak as declining consumer demand becomes a concern.

Discount retailer Ross Stores, Inc. (ROST.US) reported better-than-expected fourth-quarter results on Tuesday, but the company's annual sales and profit guidance fell short of analysts' expectations, reflecting a decline in consumer demand due to economic and political uncertainty, similar to its larger peers, such as GEO Group Inc. In January of this year, U.S. consumer spending saw its first decline in nearly two years, with sales at furniture, clothing, and electronics retailers significantly decreasing. The guidance warned that sales could further decline as tariffs and immigration crackdown policies loom. Ross Stores, Inc. is trying to attract more customers by offering a variety of products at different price points, but this effort has not been effective, as its core customer base - low to middle-income families - has begun to cut back on spending. CEO Jim Conroy stated, "We believe that abnormal weather and the high volatility of the macroeconomic and political environment of GEO Group Inc have had a negative impact on foot traffic." Similarly, discount retailer TJX Companies (TJX.US) predicted lower-than-expected annual same-store sales and profit in its latest financial report. Retail giants Walmart Inc. (WMT.US) and Target Corporation (TGT.US) also provided lackluster annual forecasts, anticipating that President Trump's import tariffs would put pressure on consumer spending. According to the financial report, the company expects same-store sales for the 2025 fiscal year to decrease by 1% to increase by 2%, while analysts' expectations are for a 2.9% growth, with annual earnings per share guidance set between $5.95 and $6.55, compared to market expectations of $6.69. "Given the uncertainty of these external factors, we believe it is wise to be cautious in forecasting business, especially at the beginning of the year," Conroy said. In terms of fourth-quarter performance, the company's sales declined by 1.8% year-over-year to $5.91 billion, exceeding analysts' expectations of a 1.1% decline to $5.96 billion. Earnings per share were $1.79, while the market expected earnings per share of $1.66. After the financial report was released, Ross Stores, Inc. saw a slight increase of 0.41% in its stock price after hours, recovering from its earlier decline. The stock has fallen by approximately 10% since the beginning of the year, underperforming TJX Companies.