Ross Stores: No Changes to Our Outlook or Wide Moat as Conroy Set to Succeed Rentler as CEO

Wide-moat Ross Stores appointed James Conroy (chief executive of Boot Barn since 2012) to succeed Barbara Rentler as CEO, effective February 2025. The transition in leadership does not come as a surprise, given the firm initiated a long-term succession plan for Rentler (now 67 years old) back in June 2023. However, the board’s decision to select an external candidate to fill the CEO role strikes us as peculiar, given that the off-price model tends to differ significantly from that of traditional retailers. Additionally, Rentler (CEO since 2014) and Michael Balmuth (CEO from 1996-2014) each boasted extensive experience in the merchandising division of Ross prior to their respective ascensions to the helm. Conroy’s track record at Boot Barn has proven to be stellar, but we will be interested to see how experience leading a lifestyle retail banner with $1.7 billion in annual sales translates into running the nation’s second-largest off-price retailer. However, Rentler’s commitment to serve in an advisory role through early 2027 and Balmuth’s continued presence as executive chairman give us confidence in the firm’s leadership transition plans. As such, we don’t plan on altering our $123 per share fair value estimate or our Standard Capital Allocation Rating.