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Ross Stores, Inc. (ROST), with a market cap of $50.9 billion, is a leading off-price retailer specializing in apparel and home accessories. Based in Dublin, California, the company operates under the Ross Dress for Less and dd's DISCOUNTS brands across the United States.
Companies valued at $10 billion or more are generally labeled as “large-cap” stocks, and Ross Stores fits this criterion perfectly. ROST's uniqueness lies in its extensive reach with 1,795 Ross Dress for Less stores and 353 dd's DISCOUNTS locations, allowing it to offer high-quality, brand-name merchandise at discounts of 20% to 70% off regular prices.
Despite its strong market position, the off-price retail company has experienced a decline of 6.7% from its 52-week high of $163.60, reached on Aug. 23. Shares of ROST have gained 5.7% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) marginal dip over the same time frame.
Longer term, shares of Ross Stores have gained almost 29% over the past 52 weeks, outpacing NASX's 27.6% return over the same time frame. However, ROST is 10.3% up on a YTD basis, lagging behind NASX's 17% gains.
Nevertheless, since last year, ROST has consistently traded above its 200-day moving average and has remained mostly above its 50-day moving average during this period despite fluctuations in the last few months, indicating a strong bullish trend.
ROST's outperformance over the past year is driven by effective cost control, resilient demand for discounted branded merchandise, and improved operating margins, capitalizing on consumer demand for off-price retail amid economic uncertainty. Moreover, Ross Stores stock recovered 1.8% on Aug. 23 due to a double beat in Q2, with sales of $5.3 billion and EPS of $1.59 surpassing analyst estimates, driven by stronger-than-expected value offerings. Additionally, the company raised its full-year EPS guidance and continued its stock buyback program, boosting investor confidence.
Its rival, The TJX Companies, Inc. (TJX), has risen 28.3% over the past 52 weeks, slightly lagging behind ROST over the same time frame. But, on a YTD basis, TJX’s shares have gained 26%, outpacing ROST’s gain.
Due to TJX’s outperformance over the past year, analysts remain bullish about its prospects. Among the 21 analysts covering the stock, there is a consensus rating of “Strong Buy,” and the mean price target of $176.21 suggests a premium of 15.4% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
