How Do TJX and Ross's Margins Compare to Ollie's and Burlington as the Off-Price Sector Matures?
Data as of: FY ending January 2026 (TTM)
Overview
The off-price retail sector houses two distinct margin profiles that often surprise investors. TJX and Ross Stores — the $176B and $69B giants — operate on thinner gross margins but convert more efficiently to the bottom line. Ollie's Bargain Outlet and Burlington carry higher gross margins yet lag in operating and net profitability. As the sector matures, this divergence reveals which business models truly scale.
The Margin Comparison
Gross Margin
| Company | Gross Margin (TTM) | Revenue (Latest FY) | Rev Growth (TTM) |
|---|---|---|---|
| BURL | 41.9% | $11.6B | +8.8% |
| OLLI | 40.3% | $2.3B | +12.6% |
| TJX | 31.1% | $60.4B | +7.1% |
| ROST | 27.9% | $22.8B | +7.7% |
Burlington and Ollie's lead in gross margin by a wide gap — roughly 10-14 percentage points above TJX and Ross. This reflects their merchandising strategies: Burlington and Ollie's source more closeout and opportunistic buys at steeper discounts, while TJX and Ross operate higher-velocity, brand-focused models with tighter initial markups but faster inventory turns.
Operating Margin (EBIT)
| Company | EBIT Margin (TTM) | EBITDA Margin (TTM) | EBITDA Growth (TTM) |
|---|---|---|---|
| TJX | 12.0% | 13.7% | +8.1% |
| ROST | 11.9% | 15.8% | +9.7% |
| OLLI | 11.2% | 13.7% | +11.0% |
| BURL | 8.9% | 11.0% | +21.6% |
Here the picture flips. Despite Burlington's sector-leading 41.9% gross margin, it delivers the lowest operating margin at 8.9%. The culprit: SG&A expense. Burlington's SG&A-to-revenue ratio runs approximately 33% — far above TJX at 19% and Ross at 16%. Burlington's aggressive store expansion (it has been adding ~100 net new stores annually) loads the cost structure with pre-opening expenses, new-market inefficiencies, and distribution center investments.
TJX and Ross demonstrate the power of mature off-price scale. Their decades of vendor relationships, optimized distribution networks, and established buyer teams translate gross margin into operating income more efficiently. Ross, in particular, converts its modest 27.9% gross margin into an impressive 15.8% EBITDA margin — the highest in the group.
Net Margin and Returns
| Company | Net Margin (TTM) | FCF Margin (TTM) | ROE (TTM) |
|---|---|---|---|
| ROST | 9.4% | 9.7% | 33.1% |
| TJX | 9.1% | 8.0% | 53.9% |
| OLLI | 8.8% | 6.1% | 12.2% |
| BURL | 5.3% | 2.0% | 33.8% |
Ross edges out TJX on net margin by 30 basis points, while TJX's extraordinary 53.9% ROE reflects its capital-light model and aggressive share repurchases that have compressed its equity base. Burlington's 5.3% net margin and 2.0% FCF margin signal that the company is still investing heavily in its turnaround — free cash flow is being consumed by store buildouts and supply chain upgrades.
Ollie's 8.8% net margin is respectable for a $2.3B retailer, but its 12.2% ROE trails the larger peers significantly, reflecting its earlier stage of capital deployment and lower financial leverage.
Margin Trajectory: Who's Improving Fastest?
| Company | EBITDA Growth (TTM) | EPS Growth (TTM) | Revenue CAGR 3Y |
|---|---|---|---|
| BURL | +21.6% | +21.9% | +10.0% |
| OLLI | +11.0% | +7.7% | +9.0% |
| ROST | +9.7% | +4.9% | +6.8% |
| TJX | +8.1% | +13.7% | +6.5% |
Burlington is the clear margin expansion story. Its EBITDA growth of 21.6% on 8.8% revenue growth implies roughly 1,200 bps of operating leverage. As Burlington's store base matures and fixed costs are absorbed, its margin gap with TJX and Ross should continue to narrow — though closing it entirely remains unlikely given structural SG&A differences.
Valuation Check
| Company | P/E (TTM) | P/E (Fwd) | EV/EBITDA | EV/Sales |
|---|---|---|---|---|
| TJX | 32.3x | 30.9x | 23.2x | 3.2x |
| ROST | 32.0x | 29.5x | 19.5x | 3.1x |
| BURL | 31.8x | 27.3x | 18.7x | 2.1x |
| OLLI | 28.3x | 23.1x | 19.7x | 2.7x |
All four trade in a tight P/E band of 28-32x trailing earnings, but the forward P/E spread is more telling. Ollie's at 23.1x forward looks cheapest, reflecting both its smaller scale and less consistent execution history. Burlington at 27.3x prices in its margin expansion trajectory. TJX commands a premium at 30.9x forward, which the market pays for its unmatched consistency — the company has beaten EPS estimates in virtually every quarter.
Ross at 29.5x forward and 19.5x EV/EBITDA offers arguably the best quality-adjusted value: best-in-class FCF margins, strong ROE, and consistent execution at a slight discount to TJX.
Key Takeaways
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Gross margin is misleading in off-price: Burlington's 41.9% gross margin creates an illusion of superiority, but its 8.9% EBIT margin trails TJX (12.0%) and Ross (11.9%) by 300+ bps. SG&A discipline matters more than buying spread in mature off-price.
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Ross is the quiet margin leader: With a 9.7% FCF margin — the highest in the group — and 15.8% EBITDA margin despite the lowest gross margin, Ross exemplifies operational efficiency. Its model generates the most cash per revenue dollar.
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Burlington's margin expansion is real but incomplete: 21.6% EBITDA growth versus 8.8% revenue growth shows genuine operating leverage. But at 2.0% FCF margin, Burlington is still in investment mode and years away from TJX/Ross-level cash generation.
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Ollie's occupies a different niche: As a closeout-focused value retailer (not traditional off-price), Ollie's 40.3% gross margin reflects a fundamentally different sourcing model. Its margin profile should be benchmarked against dollar stores more than TJX/Ross.
What to Watch
Burlington's path to a double-digit EBIT margin is the key swing variable for the sector. If BURL can reach 10%+ operating margin while sustaining store growth, the stock re-rates higher. For TJX and Ross, the question is whether international expansion (TJX) and new store openings (Ross targeting 2,900+ stores) can sustain mid-single-digit comps without margin dilution.
Sources: TJX FY2026 (ended Jan 2026), Ross Stores FY2025 (ended Jan 2026), Burlington FY2025 (ended Jan 2026), Ollie's FY2024 (ended Jan 2025) financial statements; company snapshot data as of March 2026.