Ross Dress for Less (ROST) is facing a growing problem, which is forcing it to contemplate a significant change that customers may not like.

In Ross’ first-quarter earnings report for 2025, the discount store chain revealed that its comparable sales remained flat during the quarter, compared to the same time period last year.

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It also generated a net income of $479 million, which is almost 2% lower than what it earned during the same quarter in 2024.

Related: Ross Stores flags a troubling consumer trend that's hurting sales

The stagnant sales and decline in net income come as Ross is seeing fewer customers visit its stores. According to recent data from Placer.ai, Ross saw average customer visits per location drop by 2.7% year-over-year during the quarter.

During an earnings call on May 22, Ross CEO Jim Conroy said the company’s performance was off to a “slower start to the spring selling season in February.” He flagged that “prolonged inflation” has impacted its core customer and how they shop in stores.

“In terms of customer behavior, perhaps you could say there’s a little bit of a shift towards more functional items versus discretionary items,” said Conroy during the call.

He also warned that tariffs (taxes companies pay to import goods from overseas) are starting to become a major threat.

Last month, President Donald Trump imposed a 10% baseline tariff (taxes companies pay to import goods from overseas) on all countries and paused reciprocal tariffs.

Related: Walmart CEO has a harsh warning for customers

The pause on reciprocal tariffs will end in July, and as a result, roughly 60 countries will soon see higher tariff rates. This could result in consumers paying higher prices for goods if businesses choose to pass down the extra cost.

“The volatility of trade policies and the corresponding impact on the economy, the consumer, and our profitability is highly unpredictable," said Conroy in the earnings report. "During these uncertain times, we will focus on what we can control and manage the business conservatively."

During the earnings call, Conroy said that Ross will be going down the shaky path of adjusting its prices, especially since over 50% of the goods it sells are sourced from China, one of the countries on which Trump imposed high tariff rates.

“As tariffs remain at elevated levels, we will be working to find the right combination of pricing versus merchandise margin compression,” said Conroy. “We believe we have a number of levers available to minimize the overall impact, but it is possible that we will see short-term pressure on our profitability.”