Ross Stores (ROST) — Company Research

Last Updated: 7 July 2026

Ross Stores, Inc. (Nasdaq: ROST) is the second-largest off-price apparel and home retailer in the United States, operating 2,267 stores across two banners — Ross Dress for Less and dd's DISCOUNTS — at the end of fiscal 2025. The company buys brand-name merchandise opportunistically and sells it at 20% to 60% below department and specialty store regular prices, running a lean, treasure-hunt model that has compounded for decades. Fiscal 2025 (the year ended 31 January 2026) delivered record sales of $22.75bn and diluted EPS of $6.61, and the business entered fiscal 2026 with unusual momentum: first-quarter comparable store sales jumped a very robust 17% and EPS grew 37%, prompting management to raise full-year guidance. This report walks through the numbers, the valuation, the competitive picture and the risks, using only primary-source filings.

1. Company Snapshot

Field	Value
Company	Ross Stores, Inc.
Ticker	ROST (Nasdaq)
Sector	Consumer & Retail — Off-price apparel & home
CEO	James G. (Jim) Conroy (CEO since February 2025)
Headquarters	Dublin, California, USA
Employees	Approximately 100,000 (full and part-time)
Stores	2,267 (Ross Dress for Less + dd's DISCOUNTS) at 31 Jan 2026
Revenue (FY2025, ended 31 Jan 2026)	$22.75bn
Net income (FY2025)	$2.15bn
Diluted EPS (FY2025)	$6.61
Market cap (4 Jul 2026)	Approximately $68.5bn
Dividend	$0.405 per share quarterly ($1.62 annualised)

2. Bull & Bear Case

Bull Case

• Extraordinary momentum: First-quarter fiscal 2026 comparable store sales rose 17% and EPS grew 37% to $2.02, far above the company's own $1.60–$1.67 guidance, with traffic the primary driver.
• Structural store runway: Management sees long-term potential to grow from roughly 2,300 locations today toward 3,600 (about 2,900 Ross and 700 dd's), a multi-year unit-growth engine.
• Fortress balance sheet: The company ended fiscal 2025 with $4.59bn cash against $1.52bn total debt, funding both aggressive buybacks and a growing dividend from internal cash flow.
• Off-price counter-cyclicality: The treasure-hunt, value proposition tends to gain share when consumers trade down, and abundant retail inventory keeps buyers well supplied with branded goods at discounts.
• Consistent capital return: Ross bought back $1.05bn of stock in fiscal 2025 and authorised a new two-year $2.55bn programme in March 2026, on top of a dividend raised for many consecutive years.

Bear Case

• Momentum may not persist: Management itself attributed part of the 17% first-quarter comp to tax-refund-driven spending, and full-year comp guidance of 6% to 7% implies a marked deceleration from the Q1 pace.
• Tariff and cost exposure: Ross flagged an approximate $0.16 per share tariff-related cost impact in fiscal 2025, and further trade-policy changes on imported apparel and home goods could pressure margins.
• Rich valuation for a retailer: At roughly 30x trailing earnings, the shares price in continued execution; any comp stumble against tough comparisons could compress the multiple quickly.
• Intense off-price competition: Larger rival TJX and fast-expanding Burlington are opening stores aggressively and competing for the same branded closeout merchandise.
• Consumer-spending sensitivity: A weaker low-to-moderate-income consumer, unseasonable weather or a merchandise-sourcing misstep can all swing quarterly sales and earnings.

3. Business Segments

Ross reports as a single off-price retail operating segment, selling through two store banners. It does not disclose revenue by banner, so the split below is estimated from the store base at 31 January 2026.

Segment	% of revenue	What it is
Ross Dress for Less	~92% (est.)	The core national off-price chain offering brand-name apparel, accessories, footwear and home fashions at 20%–60% below regular department/specialty prices. The large majority of the 2,267-store base.
dd's DISCOUNTS	~8% (est.)	A separate banner targeting more moderate-income households in convenient neighbourhood locations, offering value-focused apparel and home merchandise at sharper opening price points.

4. Business Model

Ross runs a classic off-price model built on opportunistic buying and disciplined cost control. Rather than committing to merchandise far in advance like traditional retailers, its buying organisation purchases brand-name and designer goods close to need — taking advantage of manufacturer overruns, cancelled orders and packaway opportunities — and passes the discount to shoppers.

How it makes money: Ross earns a retail gross margin on merchandise sold through no-frills stores. In fiscal 2025 cost of goods sold was $16.45bn on $22.75bn of sales, and selling, general and administrative expense was $3.60bn, leaving operating income of $2.71bn (an operating margin of roughly 11.9%). The economics hinge on inventory turns, low occupancy and payroll costs per store, and the buyers' ability to source attractive branded goods at desirable discounts.

Unit economics and moat: The treasure-hunt format — ever-changing, limited-quantity assortments — drives frequent visits and low return rates while discouraging direct online substitution. Scale gives Ross vendor access and buying leverage that smaller off-price players cannot match. Capital return is central to the model: the company self-funds new-store growth and returns surplus cash through buybacks and a rising dividend, repurchasing $1.05bn of stock and paying $528m of dividends in fiscal 2025.

5. Financial Health

All figures below are drawn from Ross Stores' fiscal year-end earnings press releases (SEC Form 8-K exhibit 99.1) and the associated condensed consolidated financial statements. Ross reports on a 52/53-week fiscal year ending on the Saturday nearest 31 January; fiscal 2025 ended 31 January 2026. The company reports GAAP results only and does not publish a separate non-GAAP "adjusted" EPS, so the Adjusted EPS column mirrors GAAP except where a one-off item is noted.

Fiscal Year	Revenue	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021 (Jan 2022)	$18.92bn	—	$4.87	$4.87	$1.14	$2,452.3m
FY2022 (Jan 2023)	$18.70bn	−1.2%	$4.38	$4.38	$1.24	$2,456.5m
FY2023 (Feb 2024)	$20.38bn	+9.0%	$5.56	$5.56	$1.34	$2,211.0m
FY2024 (Feb 2025)	$21.13bn	+3.7%	$6.32	$6.18¹	$1.47	$1,515.1m
FY2025 (Jan 2026)	$22.75bn	+7.7%	$6.61	$6.61	$1.62	$1,017.9m

¹ FY2024 adjusted EPS of $6.18 excludes a $0.14 per share gain from the sale of a packaway facility. Long-term debt is the non-current portion at year-end; Ross also carried $499.7m current portion of long-term debt at 31 January 2026, for total debt of $1.52bn against $4.59bn of cash.

Quarter	Revenue	Adjusted EPS	GAAP EPS
Q1 FY2026 (May 2026)	$6.01bn	$2.02	$2.02
Q4 FY2025 (Jan 2026)	$6.64bn	$2.00	$2.00
Q3 FY2025 (Nov 2025)	$5.60bn	$1.58	$1.58
Q2 FY2025 (Aug 2025)	$5.53bn	$1.56	$1.56
Q1 FY2025 (May 2025)	$4.98bn	$1.47	$1.47
FY2025 total	$22.75bn	$6.61	$6.61

Operating cash flow was $3.03bn in fiscal 2025 and capital expenditure was $819m, leaving roughly $2.21bn of free cash flow — comfortably covering both the dividend and buybacks. See the Live Charts for the current price picture.

6. Valuation

Raw metrics, July 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	~$68.5bn (share ~$212.75 × ~322m diluted shares, 4 Jul 2026)
Trailing P/E (GAAP)	~29.7x (share $212.75 / TTM EPS $7.16; TTM = FY2025 $6.61 + Q1 FY2026 $2.02 − Q1 FY2025 $1.47)
P/E (forward)	~27.9x (FY2026 EPS guidance midpoint $7.62)
P/S (TTM)	~2.9x (market cap $68.5bn / TTM revenue ~$23.78bn)
P/FCF	~31x (market cap $68.5bn / FCF ~$2.21bn; FCF = operating CF $3,026.9m − capex $819.3m per FY2025 cash flow statement)
Enterprise value	~$65.4bn (market cap $68.5bn + total debt $1.52bn − cash $4.59bn per FY2025 balance sheet)
EV/EBITDA (TTM)	~20x (EV $65.4bn / FY2025 EBITDA ~$3.22bn; EBITDA = operating income $2,707m + D&A $509m)
52-week high	$242.81 (6 Jun 2026)
52-week low	$126.32
Short interest (% of float)	~2.4% (mid-May 2026 settlement)
Days to cover	~2.5 days

7. What Are They Building

Ross's growth agenda is deliberately unglamorous: more stores, better merchandising and a sharper customer experience. Under CEO Jim Conroy, who joined from Boot Barn in early 2025, the company has leaned into marketing to acquire and engage customers, invested in the in-store experience, and refined its Spring and seasonal assortments — efforts management credits for the broad-based traffic strength in the first quarter of fiscal 2026.

The core long-term project is unit expansion. Ross continues to open roughly 80–90 net new stores a year and has stated it sees room to grow the Ross banner toward about 2,900 locations and dd's DISCOUNTS toward about 700, versus 2,267 combined today. Alongside store growth, the company is widening its addressable customer base through the lower-price-point dd's banner and expanding distribution-centre capacity to support the larger fleet. There is no meaningful e-commerce build-out; Ross remains a physical-store, buy-it-when-you-see-it retailer, which keeps capital intensity low and free cash flow high.

8. Competitive Landscape

Ross competes in the US off-price channel, chiefly against TJX (T.J. Maxx, Marshalls, HomeGoods) and Burlington, as well as against traditional department stores' clearance operations and online discounters. Off-price players compete for the same pool of branded closeout merchandise and increasingly for the same value-seeking customer.

Peer	Market cap (Jul 2026)	Key 2025 metric
The TJX Companies (TJX)	~$177bn	Off-price leader; ~21% US off-price share; expanding globally toward 7,000+ stores
Burlington Stores (BURL)	~$16bn	Fast-growing #3 off-price; ~110 net new stores planned; treasure-hunt/fashion focus
Ross Stores (ROST)	~$68.5bn	#2 off-price; 2,267 stores; FY2025 sales $22.75bn, EPS $6.61

9. Leadership & Ownership

James G. (Jim) Conroy has served as Chief Executive Officer since February 2025 and joined the Board in 2024. He previously led Boot Barn Holdings as President and CEO and brings more than 25 years of retail management experience. Longtime executive chairman Michael Balmuth stepped down from that role on 31 January 2026 and retired from the Board in early 2026. Insider transactions in 2026 have been dominated by scheduled equity grants and Balmuth's post-retirement stock sales rather than open-market purchases.

Name	Date	Type	Shares	Price	Value	Plan Type
Michael Balmuth (Fmr Exec Chairman)	23 Mar 2026	Sale	25,615	~$213.66	~$5.47m	Form 144 / 10b5-1
Michael Balmuth (Fmr Exec Chairman)	24 Mar 2026	Sale	20,449	~$214.45	~$4.39m	Form 144 / 10b5-1
James G. Conroy (CEO)	22 Mar 2026	Grant (RSUs)	21,140	$0.00	Equity award	2017 Equity Incentive Plan

No material open-market insider buying has been reported in 2026; the CEO's directly held stake stood at approximately 178,293 shares following the March grant.

10. Risks

• Comparable-sales deceleration (Operational): The 17% Q1 FY2026 comp was partly tax-refund-driven; guidance implies a sharp slowdown to 6–7% for the year, and a miss against tough comparisons would pressure the shares.
• Tariffs and trade policy (Macro/Regulatory): Ross imports apparel, footwear and home goods; new or higher tariffs (it cited ~$0.16 EPS of tariff cost in FY2025) can raise merchandise costs and dampen consumer confidence.
• Merchandise sourcing (Operational): The model depends on the availability of attractive brand-name closeout goods at desirable discounts; a tighter supply of quality merchandise would compress margins or assortments.
• Consumer spending (Macro): Ross skews to lower-and-moderate-income shoppers whose discretionary spending is sensitive to inflation, employment and interest rates.
• Competitive intensity (Competitive): TJX and Burlington are expanding store counts and bidding for the same branded merchandise, which can pressure both sourcing costs and market share.
• Weather and seasonality (Operational): Unseasonable weather can disrupt demand for seasonal apparel and cause temporary store closures and delivery delays.

11. Recent Developments

• 21 May 2026 — Robust first-quarter results. Ross reported Q1 FY2026 sales up 21% to $6.0bn, comparable store sales up 17%, and EPS up 37% to $2.02, well above its $1.60–$1.67 guidance; operating margin reached 13.4%.
• 21 May 2026 — Full-year outlook raised. Management lifted fiscal 2026 comp guidance to 6–7% (from 3–4%) and EPS guidance to $7.50–$7.74, growth of 13–17% over the prior year's $6.61.
• March 2026 — New buyback authorisation. The Board approved a two-year $2.55bn share-repurchase programme; Ross remains on track to buy back $1.275bn of stock in fiscal 2026 and repurchased 1.5m shares for $319m in Q1.
• 3 Mar 2026 — Record fiscal 2025 close. Q4 FY2025 sales rose 12% to $6.6bn with a 9% comp and EPS of $2.00; full-year sales reached a record $22.75bn with EPS of $6.61.
• 31 Jan 2026 — Board transition. Michael Balmuth stepped down as Executive Chairman, completing the leadership handover to CEO Jim Conroy.

12. Key Dates

• Expected late August 2026 — Q2 FY2026 results (13 weeks ending 1 Aug 2026); guidance is for 6–7% comps and EPS of $1.85–$1.93.
• Expected November 2026 — Q3 FY2026 results.
• Expected March 2027 — Q4 and full fiscal 2026 results.
• Expected August 2026 — Next quarterly dividend of $0.405 per share, typically declared alongside Q2 results.

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