Ross Stores Faces Margin Pressures and Pricing Challenges Amid Market Share Gains

Aneesha Sherman, an analyst from Bernstein, maintained the Hold rating on Ross Stores (ROST – Research Report). The associated price target remains the same with $147.00.

Aneesha Sherman has given her Hold rating due to a combination of factors impacting Ross Stores. The company’s recent earnings were affected by tariffs, which have put pressure on margins and demand. Ross Stores experienced a significant margin headwind in Q2 due to tariffs on direct import goods and additional costs related to handling and ticketing items.
Moreover, while Ross Stores is gaining market share as a value destination, the company’s ability to raise prices is limited due to its value-sensitive customer base. Previous attempts to increase prices resulted in a pullback from customers, indicating potential challenges in maintaining sales volume if prices are raised. Consequently, the expected benefits from gaining market share might be offset by reduced sales volume, leading to a cautious outlook and a Hold rating.

In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $126.00 price target.

Based on the recent corporate insider activity of 52 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ROST in relation to earlier this year.