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what it is
Ross buys branded goods cheap, sells them 20% to 60% below department stores, and turns treasure-hunt shopping into $21.1 billion of annual sales.
how it gets paid
Last year Ross Stores made $21.1B in revenue. apparel was the main engine at $10.1B, or 48% of sales.
why it's growing
Revenue grew 3.7% last year. Indeed, investors cheered the discount store chain’s better-than-expected third-quarter results and upbeat fiscal 2025 outlook, which suggested strong business momentum going into the holiday season.
what just happened
Ross delivered a 15.3% EPS beat, and investors pushed the stock to a fresh high.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
35/100 earnings predictability — expect surprises
28.9x trailing p/e — priced about right
0.9% dividend yield — cash in your pocket every quarter
27.5% return on capital — every dollar works hard here
xvary composite: 67/100 — average
What they do
Ross buys branded goods cheap, sells them 20% to 60% below department stores, and turns treasure-hunt shopping into $21.1 billion of annual sales.
You are not paying Ross for fancy tech. You are paying for 2,186 stores and a habit loop people already know. Off-price retail means branded goods sold below full-price stores, so what: when your budget gets tight, a 20% to 60% discount does the advertising for them. That helps Ross earn a 14.5% operating margin and 27.5% return on capital.
How they make money
$21.1B
annual revenue · their business grew +3.7% last year
apparel
$10.1B
home fashions
$4.0B
footwear
$3.2B
accessories and beauty
$2.7B
other
$1.1B
The products that matter
operates off-price retail stores
Off-price Retail
$21.1B revenue · 100% of sales
it's the entire business: $21.1B in annual revenue generated by selling branded goods at 20–60% discounts.
100% of revenue
Key numbers
$24B
fy2026 sales
The setup needs revenue to climb from $21.1B trailing to $24B in fiscal 2026, so you need nearly $2.9B of added sales for the thesis to stay clean.
27.5%
return on capital
Return on capital means profit earned on each dollar put into the business, so what: Ross gets $0.275 back for every $1 invested while many retailers struggle to clear the mid-teens.
14.5%
operating margin
Operating margin means profit after running the stores but before interest and taxes, so what: Ross keeps $14.50 from every $100 of sales while still pricing goods below full-price chains.
$1.0B
long-term debt
Debt is only 2% of capital, so what: Ross is funding a $60B equity story with a balance sheet that is unusually light for a retailer.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 75 / 100
- long-term debt $1.0B (2% of capital)
- net profit margin 9.1% — keeps 9 cents of every dollar in revenue
- return on equity 30% — $0.30 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ROST 3 years ago → it's now worth $16,290.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Ross delivered a 15.3% EPS beat, and investors pushed the stock to a fresh high.
Consensus shows last reported EPS at $1.58 versus a $1.37 estimate. EDGAR's latest-quarter revenue line shows $16.1B, which conflicts with the $21.1B TTM figure, so the cleaner signal here is the earnings beat and management's upbeat fiscal 2025 tone from.
$16.1B
revenue
$1.58
eps
24.2%
gross margin
the number that mattered
The 15.3% EPS surprise mattered most because this stock already trades at 28.9x earnings, so Ross has to keep beating, not just meeting.
-
shares of ross stores hit a fresh alltime high.
-
indeed, investors cheered the discount store chain’s better-than-expected third-quarter results and upbeat fiscal 2025 outlook (year ends january 31st), which suggested strong business momentum going into the holiday season, driven by increased demand among budgetconscious consumers.
-
the stock price has climbed by 23% since our october report.
-
the off-price retailer will likely end the year in solid fashion.
-
fiscal third-quarter sales and share profit handily beat estimates, rising 10% and 7%, respectively, from the previous year.
source: company earnings report, 2026
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What could go wrong
the top threat is a slowdown in discretionary traffic at ross stores.
med
consumer spending slowdown
Ross sells discretionary apparel and home goods. If lower-income shoppers pull back, the company feels it quickly because store traffic is the whole model.
this risk touches 100% of the $21.1B revenue base.
med
merchandise cost and tariff pressure
The off-price model works when Ross can buy branded goods cheaply enough to keep prices low and still protect profit. A sourcing shock would hit margin first.
a margin squeeze would pressure the current 9.4% net margin and 9.9% recent quarterly margin.
med
premium multiple with limited room for error
At 28.9x trailing earnings and near the top of the 52-week range, you do not have the protection of a cheap stock. A merely fine quarter can still disappoint.
the midpoint target is $200, only 7% above the current price.
a slowdown would hit the entire business at once because Ross has one segment, one revenue stream, and no higher-margin side hustle to cushion the blow.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly report
You want confirmation that holiday demand held up and that the recent 9.9% margin was not a one-quarter high-water mark.
metric
eps path to $7.00
The stock is priced for the FY2026 EPS estimate to land. If that number starts moving down, the valuation conversation changes fast.
trend
revenue follow-through
The $24B revenue estimate implies roughly 14% growth from $21.1B. That's the growth rate to watch, not the headline stock move.
risk
consumer pressure
Because all $21.1B of revenue comes from the same retail model, any sign of weaker traffic or tighter spending matters immediately.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still like the setup.
risk profile
average
stability score 3 — typical risk profile. Not a bunker stock, not a rollercoaster.
chart momentum
top 20%
technical score 2 — the trend is still favorable. The chart agrees with the recent earnings tone.
earnings predictability
35 / 100
earnings can be harder to predict than the stock's quality reputation suggests. Expect some messiness.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 480 buyers vs. 474 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$151
$248
$187
current price
$200
target midpoint · +7% from current · 3-5yr high: $230 (+25% · 6% ann'l return)
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