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Ross Stores
(NASDAQ:ROST)
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Rating:72Outperform
Price Target:
$254.00
▲(5.31% Upside)
Action:Reiterated
Date:08/21/26
ROST scores well on financial strength and a positive earnings-call update (raised guidance and strong operating performance), supported by improving leverage and strong free cash flow. The score is tempered by weak near-term technicals (price below key short-term moving averages with low momentum) and a valuation that is not especially cheap alongside a low dividend yield.
Positive Factors
Scalable off-price model
Ross benefits from a differentiated off-price model that sources excess and canceled merchandise at favorable costs. Discounted branded assortments, rapid turns and frequent product changes can support customer traffic, margins and repeat visits across cycles.
Negative Factors
Earnings quality affected by tariff refund
The tariff refund materially boosted reported earnings and margins but is nonrecurring. Comparisons will become less favorable when this benefit lapses, making underlying merchandise and operating performance more important to sustaining profit growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Scalable off-price model
Ross benefits from a differentiated off-price model that sources excess and canceled merchandise at favorable costs. Discounted branded assortments, rapid turns and frequent product changes can support customer traffic, margins and repeat visits across cycles.
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
$77.48B
Dividend Yield0.7%
Average Volume (3M)2.84M
Price to Earnings (P/E)29.0
Beta (1Y)0.53
Revenue Growth14.02%
EPS Growth31.41%
CountryUS
Employees111,000
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Retail
Share Statistics
EPS (TTM)8.33
Shares Outstanding320,781,070
10 Day Avg. Volume2,004,992
30 Day Avg. Volume2,844,231
Financial Highlights & Ratios
PEG Ratio6.01
Price to Book (P/B)9.75
Price to Sales (P/S)2.65
P/FCF Ratio27.32
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$272.50Price Target Upside12.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)7.89
Revenue Forecast (FY)$25.67B
Ross Stores Business Overview & Revenue Model
Company Description
Ross Stores, Inc., through its various subsidiaries, manages a chain of off-price retail establishments focusing on apparel and home goods. These stores operate under two main brand names: Ross Dress for Less and dd's DISCOUNTS. Their product sele...
How the Company Makes Money
Ross Stores makes money primarily by selling discounted merchandise to consumers in its physical retail stores (Ross Dress for Less and dd’s DISCOUNTS). Revenue is generated largely from retail sales of apparel and home fashion products, with addi...
Ross Stores Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call reported very strong operating and top-line performance: double-digit comparable-store sales in Q2, robust sales and EPS growth, margin expansion even excluding one-time tariff refunds, raised guidance for both the back half of the year and full-year, accelerated store openings, and active share repurchases. Key positive drivers include higher customer traffic (new, lapsed, and existing shoppers), broad-based category and geographic strength (home and cosmetics highlighted), and improved merchandise execution. Major cautions are that a sizable portion of the margin improvement and EPS benefit stems from a one-time ~$253 million tariff refund (≈$0.60 EPS and ~405 bps operating margin benefit), freight/fuel cost headwinds that may continue to deleverage margins, an 18% inventory increase that could be riskier under a consumer slowdown, and some SG&A/buying cost deleverage tied to incentives. Management emphasized that many growth initiatives are still early-stage, and execution will determine sustainability. On balance, the positive operating results, raised guidance, and momentum communicated by management outweigh the transitory and execution risks discussed.Positive Updates
Double-digit Comparable Store Sales and Strong Top-line Growth
Q2 comparable store sales increased 10% (second quarter in a row with double-digit comps). Total Q2 sales grew 13% to $6.3 billion. First half sales grew 17% to $12.3 billion with first-half comparable store sales up 13% year-over-year.
Negative Updates
Significant One-time Tariff Refund Benefit
The quarter and first half results include ~$253 million of tariff refunds (approximately $0.60 of EPS) and a ~405 basis point lift to operating margin. This is a nonrecurring benefit that materially boosted reported profitability.
Read all updates
Q2-2026 Updates
Positive
Negative
Double-digit Comparable Store Sales and Strong Top-line Growth
Q2 comparable store sales increased 10% (second quarter in a row with double-digit comps). Total Q2 sales grew 13% to $6.3 billion. First half sales grew 17% to $12.3 billion with first-half comparable store sales up 13% year-over-year.
Read all positive updates
Company Guidance
Ross raised its back‑half outlook: Q3 comparable‑store sales are now guided to +6%–7% (total Q3 sales +9%–11%) with operating margin expected at 11.7%–12.0% (vs. 11.6% LY) and EPS $1.75–$1.83 (vs. $1.58 LY); Q4 comps are guided to +4%–5% (vs. +9% LY) with EPS $2.17–$2.26 (vs. $2.00 LY); full‑year EPS is now expected at $8.61–$8.77 (vs. $6.61 LY), which includes roughly $0.60 of EPS from tariff refunds. Other assumptions: ~51 new store openings in Q3 (41 Ross, 10 dd's), 115 total openings in 2026 (up from 110), ~5–10 relocations/closures, diluted shares ≈319M, net interest income ≈$30M, tax rate ≈25%; management expects slightly higher merchandise margins and DC leverage to help flow‑through but flags a freight/headwind from higher fuel; share repurchase plans remain on track (≈1.4M shares / $319M repurchased this quarter; $1.275B targeted repurchases in 2026 under a $2.55B authorization).Ross Stores Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
74
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.51B | 22.75B | 21.13B | 20.38B | 18.70B | 18.92B |
| Gross Profit | 7.33B | 6.36B | 5.87B | 5.58B | 4.75B | 5.21B |
| EBITDA | 4.10B | 3.75B | 3.27B | 2.97B | 2.46B | 2.69B |
| Net Income | 2.66B | 2.15B | 2.09B | 1.87B | 1.51B | 1.72B |
Balance Sheet | ||||||
| Total Assets | 15.98B | 15.55B | 14.91B | 14.30B | 13.42B | 13.64B |
| Cash, Cash Equivalents and Short-Term Investments | 4.31B | 4.59B | 4.73B | 4.87B | 4.55B | 4.92B |
| Total Debt | 4.74B | 5.21B | 5.68B | 5.75B | 5.71B | 5.62B |
| Total Liabilities | 9.24B | 9.36B | 9.40B | 9.43B | 9.13B | 9.58B |
| Stockholders Equity | 6.74B | 6.19B | 5.51B | 4.87B | 4.29B | 4.06B |
Cash Flow | ||||||
| Free Cash Flow | 2.79B | 2.21B | 1.64B | 1.75B | 1.04B | 1.18B |
| Operating Cash Flow | 3.66B | 3.03B | 2.36B | 2.51B | 1.69B | 1.74B |
| Investing Cash Flow | -870.39M | -819.27M | -637.46M | -762.81M | -654.07M | -557.84M |
| Financing Cash Flow | -2.35B | -2.34B | -1.86B | -1.43B | -1.41B | -1.15B |
Ross Stores Technical Analysis
Positive
241.19
Price Trends
234.54
Positive
229.55
Positive
209.34
Positive
Market Momentum
0.23
Positive
50.75
Neutral
52.81
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 241.19 is below the 20-day moving average (MA) of 246.23, above the 50-day MA of 234.54, and above the 200-day MA of 209.34, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 50.75 is Neutral, neither overbought nor oversold. The STOCH value of 52.81 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 |
|---|---|---|---|---|---|---|---|
86 Outperform | $6.51B | 14.38 | 17.64% | ― | 11.23% | 8.96% | |
73 Outperform | $20.81B | 33.91 | 37.72% | ― | 10.60% | 19.47% | |
72 Outperform | $77.48B | 28.99 | 42.34% | 0.71% | 14.02% | 31.41% | |
69 Neutral | $7.33B | 7.78 | 26.47% | 3.58% | 1.58% | 11.13% | |
68 Neutral | $155.44B | 25.78 | 59.77% | 1.14% | 7.66% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $2.83B | 10.22 | 17.24% | 2.94% | 6.22% | 65.05% |
* Consumer Cyclical Sector Average
ROST
Ross Stores
241.19
92.25
61.94%
AEO
American Eagle
16.73
3.86
30.03%
GAP
Gap Inc
20.15
-1.48
-6.86%
TJX
TJX Companies
139.48
3.91
2.88%
URBN
Urban Outfitters
75.78
-2.23
-2.86%
BURL
Burlington Stores
315.27
34.97
12.48%
Ross Stores Corporate Events
Executive/Board ChangesShareholder Meetings
Ross Stores Shareholders Approve Directors, Pay and Equity Plan
Positive
May 27, 2026
At its virtual Annual Meeting of Stockholders held on May 20, 2026, Ross Stores, Inc. shareholders elected nine directors to one-year terms expiring at the 2027 annual meeting, with all board nominees receiving solid support. Investors also backed...
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.