Ross Stores (ROST)
NASDAQ:ROST
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Ross Stores
(NASDAQ:ROST)
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Rating:76Outperform
Price Target:
$245.00
▲(7.54% Upside)
Action:Reiterated
Date:05/22/26
ROST scores well primarily due to strong cash flow generation, solid profitability, improving leverage, and upbeat FY26 guidance with enhanced shareholder returns. The score is held back by the notable TTM gross-margin decline, mixed/weak near-term technical momentum, and a premium P/E alongside a low dividend yield.
Positive Factors
Strong free cash flow
Consistent, large free cash flow (~$2.6B TTM, +19%) provides durable internal funding for store growth, distribution investments, buybacks and dividends. High FCF supports capital allocation flexibility and resilience through retail cycles over the next several quarters.
Negative Factors
Sharp gross-margin decline
A persistent drop in gross margin from prior annual norms to ~20.8% would structurally erode operating leverage and earnings power if sustained. Margin compression can force trade-offs between promotions, pricing, or expense cuts that weaken long-term profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Consistent, large free cash flow (~$2.6B TTM, +19%) provides durable internal funding for store growth, distribution investments, buybacks and dividends. High FCF supports capital allocation flexibility and resilience through retail cycles over the next several quarters.
Read all positive factors
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:
The Fly
The FlyRoss Stores (ROST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.97B
Dividend Yield0.9%
Average Volume (3M)2.34M
Price to Earnings (P/E)28.1
Beta (1Y)0.57
Revenue Growth11.86%
EPS Growth13.46%
CountryUS
Employees107,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)7.22
Shares Outstanding322,148,160
10 Day Avg. Volume3,228,599
30 Day Avg. Volume2,339,242
Financial Highlights & Ratios
PEG Ratio5.96
Price to Book (P/B)9.75
Price to Sales (P/S)2.65
P/FCF Ratio27.32
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue3.22
Enterprise Value/Gross Profit11.37
Enterprise Value/Ebitda20.77
Forecast
1Y Price Target
$259.08Price Target Upside13.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)7.47
Revenue Forecast (FY)$24.55B
Ross Stores Business Overview & Revenue Model
Company Description
Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names. Its stores primarily offer apparel, accessories, footwear, and home fashions...
How the Company Makes Money
Ross Stores makes money primarily by selling discounted branded merchandise through its physical retail stores under the Ross Dress for Less and dd’s DISCOUNTS banners. Revenue is generated at the point of sale from retail transactions across majo...
Ross Stores Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Neutral
The quarter showed resilient top-line growth (+3% to $5.0B), stable operating margin (12.2%) and executional positives including sequential improvement, strong category (cosmetics) performance, dd's momentum, continued share repurchases and progress on the branded strategy. Offsetting these positives are meaningful near-term risks from tariffs (material margin and EPS pressure in Q2), withdrawn annual guidance due to uncertain trade and macro dynamics, modest net income decline and sourcing concentration in China that creates receipt and margin risk. Overall, the call balanced operational strengths and strategic progress against tangible near-term macro and tariff headwinds.Positive Updates
Top-Line Growth and EPS Stability
Total sales grew 3% to $5.0 billion and comparable store sales were flat year-over-year. Diluted earnings per share were $1.47 versus $1.46 a year ago (essentially flat), and the company reported that sales and earnings performed at the high end of expectations for the quarter.
Negative Updates
Tariff-Driven Margin Pressure
Merchandise margin declined ~45 basis points in Q1, primarily due to higher ocean freight costs and the initial impact of tariffs (including goods that were on the water when tariffs increased). Company expects a $0.11–$0.16 EPS headwind in Q2 from announced tariffs and projects a 90–120 basis point negative impact to Q2 operating margin from tariffs.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-Line Growth and EPS Stability
Total sales grew 3% to $5.0 billion and comparable store sales were flat year-over-year. Diluted earnings per share were $1.47 versus $1.46 a year ago (essentially flat), and the company reported that sales and earnings performed at the high end of expectations for the quarter.
Read all positive updates
Company Guidance
Ross withdrew its full-year guidance and gave a guarded Q2 outlook for the 13 weeks ending Aug. 2, 2025: comparable-store sales flat to +3%, total sales up 2%–6% year-over-year, diluted EPS $1.40–$1.55 (which includes a $0.11–$0.16 tariff-related headwind), operating margin 10.7%–11.4% (incorporating a 90–120 bps negative tariff impact, mostly to merchandise margin), net interest income ≈ $29M, an effective tax rate of 24%–25% and ~325M diluted shares outstanding; management also expects to open 31 stores in Q2 (28 Ross, 3 dd’s), remains on track to repurchase $1.05B of stock in 2025 (after buying 2M shares for $263M in Q1 under a $2.1B authorization), and noted quarter‑end inventory metrics of consolidated +8%, average store inventories +4% and packaway at 41%.Ross Stores Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.78B | 22.75B | 21.13B | 20.38B | 18.70B | 18.92B |
| Gross Profit | 6.73B | 6.36B | 5.87B | 5.58B | 4.75B | 5.21B |
| EBITDA | 3.69B | 3.58B | 3.27B | 2.97B | 2.46B | 2.69B |
| Net Income | 2.32B | 2.15B | 2.09B | 1.87B | 1.51B | 1.72B |
Balance Sheet | ||||||
| Total Assets | 15.55B | 15.55B | 14.91B | 14.30B | 13.42B | 13.64B |
| Cash, Cash Equivalents and Short-Term Investments | 4.13B | 4.59B | 4.73B | 4.87B | 4.55B | 4.92B |
| Total Debt | 4.72B | 5.21B | 5.68B | 5.75B | 5.71B | 5.62B |
| Total Liabilities | 9.25B | 9.07B | 9.40B | 9.43B | 9.13B | 9.58B |
| Stockholders Equity | 6.30B | 6.48B | 5.51B | 4.87B | 4.29B | 4.06B |
Cash Flow | ||||||
| Free Cash Flow | 2.63B | 2.21B | 1.64B | 1.75B | 1.04B | 1.18B |
| Operating Cash Flow | 3.45B | 3.03B | 2.36B | 2.51B | 1.69B | 1.74B |
| Investing Cash Flow | -820.85M | -819.27M | -637.46M | -762.81M | -654.07M | -557.84M |
| Financing Cash Flow | -2.28B | -2.34B | -1.86B | -1.43B | -1.41B | -1.15B |
Ross Stores Technical Analysis
Positive
227.82
Price Trends
219.56
Positive
207.22
Positive
183.02
Positive
Market Momentum
-0.28
Negative
65.61
Neutral
65.58
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 227.82 is above the 20-day moving average (MA) of 221.48, above the 50-day MA of 219.56, and above the 200-day MA of 183.02, indicating a bullish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 65.61 is Neutral, neither overbought nor oversold. The STOCH value of 65.58 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 20 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $174.28B | 32.97 | 59.66% | 1.07% | 8.06% | ― | |
79 Outperform | $6.31B | 13.30 | 17.64% | ― | 11.23% | 8.96% | |
76 Outperform | $69.97B | 28.07 | 37.96% | 0.90% | 11.86% | 13.46% | |
64 Neutral | $19.86B | 31.09 | 39.79% | ― | 8.76% | 22.13% | |
63 Neutral | $8.46B | 15.26 | 22.98% | 2.45% | 1.86% | -2.54% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $2.77B | 11.22 | 12.12% | 2.09% | 3.16% | -32.51% |
* Consumer Cyclical Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.