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With a market cap of $49.8 billion, California-based Ross Stores, Inc. (ROST) is a leading off-price retailer specializing in apparel and home fashion. The company serves middle and moderate-income households with discounted branded merchandise, distinguishing itself from traditional retail offerings.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Ross Stores fits this criterion perfectly, exceeding the mark. Ross Stores stands as the largest off-price retailer in the U.S., operating 1,765 stores under the Ross Dress for Less brand across 45 states, the District of Columbia, and Guam, alongside over 300 locations for DD's Discounts, primarily in Sun Belt states.
However, the discount retailer has dipped 1.2% from its 52-week high of $151.12, achieved in February. Over the past three months, its shares have gained 1.4%, trailing behind the broader S&P 500 Index's ($SPX) 4.3% increase during the same period.
Longer term, ROST has gained 7.9% on a YTD basis, which lags behind the SPX’s 14.6% jump. Nevertheless, shares of Ross Stores have surged nearly 39.2% over the past 52 weeks, outpacing the SPX's 25.2% returns over the same time frame.
ROST has been trading above its 50-day and moving average since late May and remained above its 200-day moving average since June last year, indicating a bullish price trend.
Ross Stores has outperformed over the past year due to the successful execution of strategic initiatives, including store expansion, improved merchandise margins driven by lower costs, and strong comparable store sales performance bolstered by positive customer response and effective operational efficiencies.
Plus, after the company reported its Q1 earnings results on May 23, which surpassed Wall Street estimates and included an upward revision of its annual profit forecast, the stock surged almost 7.8% in the subsequent trading session. The company's robust performance was fueled by heightened consumer traffic, optimistic guidance for Q2, and its ongoing share repurchase initiatives.
Also, its rival, The TJX Companies, Inc. (TJX), has been slightly underperforming ROST over the past 52 weeks with a gain of 37.3%. Meanwhile, on a YTD basis, TJX has outperformed ROST surging nearly 18.3%.
Despite the stock’s relative mixed price action, analysts are optimistic about the stock's prospects. The stock has a consensus rating of “Strong Buy” from the 21 analysts in coverage, and the mean price target of $163.58 is a premium of just 9.6% 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.
