By Teresa Rivas
Ross Stores' comeback is clearly working, but it's not over yet.
While retail's off-price segment has long been growing, Ross wasn't always a winner in the category. More recently, though, the company's focus on value has resonated with consumers, with inflation remaining a factor in many shoppers' budgets, while its own internal changes -- from leadership to new store locations -- have also boosted its prospects.
Year-over-year sales growth at Ross reached $723 million in its most recent fiscal fourth quarter, eclipsing TJX Cos. brand Marmaxx's sales growth of $684 million. It was the first time Ross has done so since 2017, Jefferies analyst Corey Tarlowe highlighted on Wednesday.
"This inflection is notable, given Ross's smaller revenue base," he writes -- citing Ross's $21.1 billion in revenue versus MarMaxx's $34.6 billion, as of 2024 -- "and underscores that its recent execution gains are not just driving faster percentage growth, but translating into greater absolute dollar share gains within Off--Price." He also notes that Ross's gains have been driven by stronger traffic trends, while MarMaxx has generally seen shoppers buy more per visit.
The shift is also important because TJX, the largest and most dominant off-price retailer, has long been the gold standard in the industry.
Much of this progress reflects changes led by Ross CEO James Conroy, who officially took over the corner office in 2024 after coming from Boot Barn, a retailer whose stock has done well over the past five years.
"Store refreshes and improved layouts appear to be supporting traffic and comps, while tighter merchandising discipline...and better regionalization is helping align value with local demand," Tarlowe writes. "Early brand--building and marketing efforts are also gaining resonance with value--oriented consumers, alongside leadership changes in merchandising that are sharpening execution and pricing discipline."
All that explains why Tarlowe still has a Buy rating on the shares, despite their 17% jump year to date alone; he has a $242 price target on Ross.
He's not alone. Although the stock has had a great year, two-thirds of analysts tracked by FactSet have a Buy rating or the equivalent on Ross, with an average price target of $235, implying 13.5% upside from a recent $207.
On Tuesday, J.P. Morgan analyst Matthew Boss likewise reiterated a bullish stance on the shares following his meetings with Ross executives, which increased his confidence that although the stock has rallied, there are catalysts that can keep supporting more gains.
"Looking forward, CEO Conroy cited current strategic initiatives in 'very early days' and [pointed] to durable multiyear incremental upside for same-store-sales growth," Boss wrote. His price target is $248.
Ross trades around 25 times next year's earnings, about in line with its five-year average, even as consensus calls for earnings-per-share growth to accelerate to more than 10% this year and next.
Although some investors may be worried that higher oil prices will curtail consumer-discretionary spending, that's likely only if Americans face sustained high prices at the pump. It's also likely to drive more shoppers toward off-price retailers like Ross as they try to get more bang for their buck.
Expect Ross to stay on the right track.
Write to Teresa Rivas at teresa.rivas@barrons.com
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March 19, 2026 02:00 ET (06:00 GMT)
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