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Ross Stores (ROST)
NASDAQ:ROST
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Ross Stores
(NASDAQ:ROST)
Rating:75Outperform
Price Target:
$162.00
▲(12.66%Upside)
Positive Factors
Market Opportunity
Ross Stores remains favorably positioned in a growing off-price market with market share opportunity from department store share loss.
Market Positioning
Ross is gaining market share as a trade-down destination due to its strong value positioning.
Sales Performance
Sales improved sequentially through the quarter, with cosmetics being the best performing category and broad-based strength across income demographics.
Negative Factors
Guidance Uncertainty
Management pulled full-year guidance due to macroeconomic and tariff-related uncertainty, which was unexpected given the company's nimble model.
Margin Pressure
Management guided to 90-120 basis points of margin pressure in the second quarter from tariffs, reflecting goods in transit and increased distribution center labor costs.
Tariff Impact
Tariffs have negatively impacted Ross's margins and demand.
Ross Stores (ROST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$47.29B
Dividend Yield1.05%
Average Volume (3M)3.19M
Price to Earnings (P/E)22.7
Beta (1Y)0.75
Revenue Growth2.49%
EPS Growth6.60%
CountryUS
Employees107,000
SectorConsumer Cyclical
Sector Strength63
IndustryApparel - Retail
Share Statistics
EPS (TTM)1.47
Shares Outstanding328,834,200
10 Day Avg. Volume3,098,511
30 Day Avg. Volume3,186,355
Financial Highlights & Ratios
PEG Ratio-41.59
Price to Book (P/B)7.08
Price to Sales (P/S)0.00
P/FCF Ratio24.53
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$152.93Price Target Upside6.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Ross Stores Business Overview & Revenue Model
Company DescriptionRoss Stores, Inc. (ROST) is a leading American off-price retail company, operating under the brand names Ross Dress for Less and dd's DISCOUNTS. The company offers a wide range of name-brand apparel, accessories, footwear, and home decor at significantly discounted prices compared to traditional department stores. Established in 1982, Ross Stores has grown to become one of the largest off-price retailers in the United States, with a focus on providing exceptional value to cost-conscious customers.
How the Company Makes MoneyRoss Stores makes money primarily through the sale of discounted apparel, footwear, accessories, and home goods. The company's revenue model is based on purchasing excess inventory from manufacturers and department stores at reduced prices and passing these savings onto customers. This off-price retail strategy allows Ross Stores to offer competitive pricing, attracting a wide customer base looking for brand-name products at lower costs. The company operates a vast network of retail locations across the United States, generating revenue from in-store sales. Additionally, Ross Stores benefits from economies of scale and efficient inventory management, which help maintain profitability. Key factors contributing to its earnings include strategic store locations, effective marketing, and a strong supply chain network that enables the company to continuously source and replenish its product offerings.
Ross Stores Key Performance Indicators (KPIs)
Any
Store Count
Indicates the total number of retail locations, highlighting the company's expansion strategy and market penetration. A growing store count can signal aggressive growth and increased market presence.
Indicates the total number of retail locations, highlighting the company's expansion strategy and market penetration. A growing store count can signal aggressive growth and increased market presence.
Data provided by:
Main Street Data
Main Street DataRoss Stores Earnings Call Summary
Earnings Call Date:May 22, 2025
(Q1-2025)
| % Change Since: -5.55%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
Ross Stores demonstrated resilience with growth in total sales and strategic store expansions, but faced challenges with flat comparable store sales, net income decline, and significant impacts from tariffs. The withdrawal of annual guidance due to uncertainties reflects cautious sentiment.Q1-2025 Updates
Positive Updates
Total Sales Growth
Total sales grew 3% to $5 billion, achieving the high end of expectations despite a slow start.
Cosmetics Segment Performance
Cosmetics was the strongest merchandise area during the quarter with broad-based geographic trends.
Store Expansion
Opened 16 new Ross and 3 dd's discount locations, with plans for 90 new stores in 2025.
Stock Repurchase Program
Repurchased 2 million shares for $263 million, with a plan to repurchase $1.05 billion in total for 2025.
Negative Updates
Flat Comparable Store Sales
Comparable store sales were flat for the quarter, reflecting no growth versus the previous year.
Net Income Decline
Net income for the period was $479 million, down from $488 million in the same period of 2024.
Impact of Tariffs
Tariffs resulted in a merchandise margin decline of 45 basis points, with expected further impacts in the next quarter.
Limited Visibility and Guidance Withdrawal
Withdrew annual guidance due to too many unknown variables, including trade policy and consumer sentiment.
Company Guidance
During the Ross Stores First Quarter 2025 Earnings Release Conference Call, the company reported a 3% increase in total sales, reaching $5 billion, with comparable store sales remaining flat compared to the previous year. Earnings per share slightly rose to $1.47 from $1.46 in the prior year, with net income at $479 million versus $488 million for the same period in 2024. The operating margin remained steady at 12.2%. Ross Stores opened 16 new Ross locations and 3 dd's discount locations, planning to open approximately 90 new stores by year-end. Inventory levels increased by 8%, with average store inventories up 4%. The company is navigating tariff impacts, with merchandise margin declining by 45 basis points due to increased ocean freight costs and tariffs, which are projected to impact second-quarter earnings per share by $0.11 to $0.16. Despite uncertainties, Ross Stores aims to maintain a competitive pricing strategy and expects second-quarter comparable store sales to range from flat to a 3% increase, with an operating margin projected between 10.7% and 11.4%, considering a 90 to 120 basis point tariff impact.Ross Stores Financial Statement Overview
Summary
Ross Stores showcases a solid financial standing with strong income statement metrics, a stable balance sheet, and healthy cash flow generation. The company demonstrates consistent revenue and profit growth, efficient equity utilization, and strong cash conversion, positioning it well for future expansion and resilience in the discretionary retail market.Income Statement
Ross Stores has demonstrated robust financial performance with a consistent increase in revenue and profitability. The TTM shows a Gross Profit Margin of 28.0% and a Net Profit Margin of 9.9%, reflecting strong operational efficiency. Revenue growth from the previous year is impressive, and the EBIT and EBITDA margins are healthy at 12.2% and 14.5%, respectively. These metrics indicate a solid and improving income statement performance.85
Very Positive
Balance Sheet
Ross Stores maintains a stable balance sheet with a Debt-to-Equity Ratio of 1.09, indicating moderate leverage which is manageable. The Return on Equity (ROE) stands at 40.2%, showcasing efficient use of equity to generate profits. The Equity Ratio of 35.3% reflects a healthy balance between debt and equity, though there is room for improvement in reducing liabilities.78
Positive
Cash Flow
The company's cash flow position is strong, evidenced by a Free Cash Flow Growth Rate of -3.7%, which is slightly down but remains robust overall. The Operating Cash Flow to Net Income Ratio is 1.15, indicating good cash generation relative to net income. Additionally, the Free Cash Flow to Net Income Ratio is 0.80, showing effective conversion of earnings into free cash flow, supporting liquidity and potential for reinvestment.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 21.24B | 20.38B | 18.70B | 18.92B | 12.53B | 16.04B | Gross Profit |
| 5.95B | 5.58B | 4.75B | 5.21B | 2.69B | 4.50B | EBIT |
| 2.60B | 2.31B | 1.99B | 2.33B | 189.71M | 2.15B | EBITDA |
| 3.09B | 2.97B | 2.38B | 2.69B | 553.96M | 2.52B | Net Income Common Stockholders |
| 2.11B | 1.87B | 1.51B | 1.72B | 85.38M | 1.66B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 734.60M | 4.87B | 4.55B | 4.92B | 4.82B | 1.35B | Total Assets |
| 2.96B | 14.30B | 13.42B | 13.64B | 12.72B | 9.35B | Total Debt |
| 150.00M | 5.75B | 5.71B | 5.62B | 5.73B | 3.49B | Net Debt |
| -582.80M | 875.26M | 1.15B | 699.77M | 913.51M | 2.14B | Total Liabilities |
| 1.68B | 9.43B | 9.13B | 9.58B | 9.43B | 5.99B | Stockholders Equity |
| 1.29B | 4.87B | 4.29B | 4.06B | 3.29B | 3.36B |
| Cash Flow | Free Cash Flow | ||||
| 1.69B | 1.75B | 1.04B | 1.18B | 1.84B | 1.62B | Operating Cash Flow |
| 2.42B | 2.51B | 1.69B | 1.74B | 2.25B | 2.17B | Investing Cash Flow |
| -736.48M | -762.81M | -654.07M | -557.84M | -405.43M | -554.97M | Financing Cash Flow |
| -1.83B | -1.43B | -1.41B | -1.15B | 1.70B | -1.68B |
Ross Stores Technical Analysis
Positive
143.80
Price Trends
140.44
Positive
139.46
Positive
143.77
Positive
Market Momentum
0.10
Positive
50.97
Neutral
70.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROST, the sentiment is Positive. The current price of 143.8 is below the 20-day moving average (MA) of 146.10, above the 50-day MA of 140.44, and above the 200-day MA of 143.77, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 50.97 is Neutral, neither overbought nor oversold. The STOCH value of 70.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROST.
Ross Stores Risk Analysis
Ross Stores disclosed 21 risk factors in its most recent earnings report. Ross Stores reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ross Stores Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $18.44B | 78.27 | 15.84% | ― | 34.75% | 60.65% | |
75 Outperform | $47.29B | 22.73 | 39.57% | 1.05% | 2.49% | 6.60% | |
72 Outperform | $143.30B | 30.29 | 60.36% | 1.21% | 3.79% | 5.23% | |
72 Outperform | $8.05B | 9.40 | 29.16% | 2.80% | 1.07% | 28.03% | |
69 Neutral | $15.52B | 30.20 | 44.13% | ― | 8.29% | 38.09% | |
64 Neutral | $1.76B | 10.38 | 12.19% | 4.93% | -0.95% | -10.51% | |
62 Neutral | $6.88B | 11.32 | 2.95% | 3.87% | 2.70% | -24.57% |
* Consumer Cyclical Sector Average
Performance Comparison
ROST
Ross Stores
143.80
0.56
0.39%
AEO
American Eagle
10.16
-9.95
-49.48%
GAP
Gap Inc
21.95
-3.37
-13.31%
TJX
TJX Companies
128.45
22.50
21.24%
BURL
Burlington Stores
246.02
15.07
6.53%
ONON
On Holding AG
56.56
13.83
32.37%
Ross Stores Corporate Events
Executive/Board ChangesShareholder Meetings
Ross Stores Concludes Annual Stockholders Meeting
Neutral
May 28, 2025
Ross Stores held its Annual Meeting of Stockholders on May 21, 2025, where stockholders voted on three key matters. The election of 11 directors for a one-year term was approved, executive compensation received advisory approval, and Deloitte & Touche LLP was ratified as the independent public accounting firm for the fiscal year ending January 31, 2026.
The most recent analyst rating on (ROST) stock is a Buy with a $175.00 price target. To see the full list of analyst forecasts on Ross Stores stock, see the ROST Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.