Ross Stores, Inc. (ROST) Stock Analysis

Research · Sep 3, 2026

[ROST] Ross Stores Thesis 2026: Off-Price Treasure Hunt Compounds Through Trade-Down Cycle

Ross Stores Inc. FY2025 revenue ~$22-22.5B (+4-6%) with adj. EPS ~$6.50-6.80 reflecting continued post-pandemic comparable sales recovery + selected trade-down cycle benefit (consumers shifting from full-price to off-price during inflation + recession-adjacent environment) + selected operational excellence + selected merchandise margin recovery from FY2022 supply chain trough under continued CEO Barbara Rentler. Second-largest US off-price retailer (behind TJX Companies) operating Ross Dress for Less + dd's DISCOUNTS banners; founded 1982 by Stuart G. Moldaw + Donald Rowlett (acquired existing Ross Department Store chain founded 1957 by Morris 'Morrie' Ross; transformed to off-price model 1982; IPO 1985 ~$70M raised); headquartered in Dublin California; ~106,000+ employees; fiscal year ends ~February. ~2,200+ stores across 41 states with ~$22-22.5B revenue; ~1,830 Ross Dress for Less stores (~92% of revenue, $20.5B; mass + middle-income clientele; ~30%+ off department store prices) + ~360+ dd's DISCOUNTS stores (~8%, $1.5B; lower-income clientele). Same-store sales +3-4% FY2025 (selected stabilization from +6.7% FY2024 + +7.0% FY2023 trade-down peak). Off-price model: opportunistic buying from manufacturers' closeouts + cancellations + selected; rotating merchandise mix creates 'treasure hunt' experience. Category mix: Apparel ~50% + Home & accessories ~30% + Footwear/accessories ~20%. CEO Barbara Rentler since June 2014 (succeeded Michael Balmuth CEO 1996-2014 retired; Rentler ex-Ross Chief Merchant 2009-2014 + ~30+ year off-price retail career; selected lifelong off-price merchandising heritage). Capital return: dividend $1.46-1.54/share annual (~30 consecutive year increases — Dividend King-adjacent) + buybacks $1-2B; net cash position ~$3-4B; investment-grade A2/A credit rating. FY2026 thesis: trade-down cycle continuation + comparable sales resilience + store growth + capital return. Risks: consumer discretionary spending, tariff exposure (~30%+ China sourcing), competitive intensity (TJX + Burlington).

Research · Mar 12, 2026

Off-Price Retail Scorecard: Ranking OLLI, FIVE, BURL, TJX, and ROST on Growth and Margins

TJX leads the off-price retail group with 12% operating margins and 54% ROE, while Ollie's offers the best value at 23x forward P/E with double-digit revenue growth. Five Below commands the richest valuation despite the weakest earnings track record, making it the least attractive risk/reward in the group.

Research · Mar 12, 2026

How do TJX and Ross's margins compare to Ollie's and Burlington as the off-price sector matures?

Burlington and Ollie's carry significantly higher gross margins (41.9% and 40.3%) than TJX and Ross (31.1% and 27.9%), but the larger players convert more efficiently — TJX and Ross deliver 12.0% and 11.9% operating margins respectively versus Burlington's 8.9%. Ross emerges as the quiet margin leader with a best-in-class 9.7% FCF margin, while Burlington's 21.6% EBITDA growth signals the fastest margin expansion trajectory in the group.

Research · Mar 12, 2026

How does Ollie's gross margin compare to TJX and Burlington as closeout deal flow tightens?

Ollie's 40.3% TTM gross margin ranks between Burlington (41.9%) and well above TJX (31.1%) and Ross (27.9%), but OLLI's quarterly margins compressed 180bps YoY in Q4 2025 while TJX expanded by 140bps. The divergence highlights OLLI's vulnerability to tightening closeout supply versus TJX's diversified sourcing model, with operating margin (10.2% vs TJX's 13.0%) further constrained by SGA deleveraging at smaller scale.