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Ross Stores, Inc. (ROST), headquartered in Dublin, California, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names. Valued at $45.7 billion by market cap, ROST offers designer apparel, accessories, footwear, and home fashions at discount prices.
Shares of this leading off-price retailer have outperformed the broader market considerably over the past year. ROST has gained 21.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. However, in 2024, ROST stock is down 1%, while the SPX is up 9.9% on a YTD basis.
Zooming in further, ROST has also surpassed the SPDR S&P Retail ETF (XRT). The exchange-traded fund has gained about 9.2% over the past year. However, the ETF’s marginal gains on a YTD basis outshines the stock’s decline over the same time frame.
ROST’s overall performance can be attributed to successful strategic initiatives such as store expansion and improved merchandise margins. The company's focus on providing value-priced merchandise has appealed to consumers facing inflationary pressures, leading to positive customer response and increased foot traffic. Moreover, its ability to offer desirable products at discounted prices has solidified its position as a top choice for budget-conscious shoppers.
ROST shares climbed over 7% the following trading session after the company reported its Q1 results on May 23. Its EPS of $1.46 surpassed Wall Street expectations of $1.34. The company’s revenue was $4.86 billion, topping Wall Street forecasts of $4.83 billion. ROST expects full-year EPS to be between $5.79 and $5.98, up from a previous forecast of $5.64 to $5.89.
For the current fiscal year, ending in January 2025, analysts expect ROST’s EPS to grow 7.4% to $5.97 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 21 analysts covering ROST stock, the consensus is a “Strong Buy.” That’s based on 18 “Strong Buy” ratings and three “Holds.”
On Jul. 12, Bank of America Securities analyst Lorraine Hutchinson maintained a “Buy” rating on ROST stock.
The mean price target of $163.58 represents a 19.4% premium to ROST’s current price levels. The Street-high price target of $176 suggests an upside potential of 28.5%.
On the date of publication, Neha Panjwani 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.
