Another off-price retailer just turned more optimistic about its future. Bargain hunting is the name of the game.

By Claudia Assis

Ross Stores joins TJ Maxx parent in a beat and raise for the ages.

Ross enters the holiday season with "strong momentum," CEO Jim Conroy said.

Ross Stores Inc. on Thursday joined TJ Maxx parent TJX Cos. in turning more positive about the immediate future - the latest sign that financially stretched consumers continue to flock to off-price apparel retailers seeking bargains.

Ross Stores (ROST), which owns Ross Dress for Less and DD's Discounts stores, long has been a favorite on the Street among discount apparel retailers.

Plenty of investors believe that Ross stands to benefit as people see prices creeping up elsewhere in their budgets and decide to trade down in apparel. Thursday's earnings beat and guidance raise, alongside an enviable jump in same-store sales, reinforced that view.

TJX Cos. (TJX), which also owns Marshalls, HomeGoods and other store brands, also raised its full-year outlook and beat expectations when it reported quarterly earnings on Wednesday.

Ross enters the holiday season with "strong momentum" and ready to offer "a compelling merchandise assortment across all our stores," Chief Executive Jim Conroy said in a statement.

The company raised its same-store sales forecast for its fiscal fourth quarter, expecting them to be up 3% to 4%. Tariff-related costs are expected to be "negligible" in the quarter, the company said.

Based on results and the updated fourth-quarter forecast, Ross upped its profit guidance for fiscal 2025 to between $6.38 a share and $6.46 a share. That compares with Wall Street consensus expectations of $6.25 a share for the year, according to FactSet.

"We are optimistic about our prospects for the holiday season, driven by our ongoing focus on delivering quality, branded merchandise at exceptional value," Conroy said. "This approach continues to gain strong traction with the consumer, particularly in an environment of rising prices across mainstream retail."

Ross reported earnings of $1.58 a share for the quarter ended Nov. 1, including a nickel a share in negative impact from tariff-related costs, it said. Analysts polled by FactSet expected earnings of $1.42 a share.

Sales for the fiscal third quarter rose 10% to $5.6 billion, compared $5.1 billion in the previous-year quarter and Wall Street consensus for $5.4 billion.

Comparable-store sales jumped 7%, compared with expectations of a 3.9% rise, according to FactSet.

Ross stock rose nearly 3% in after-hours trading. Its shares have gained 6% so far this year, compared with an advance around 11% for the S&P 500 index SPX, but they have outperformed the index in the last three months - up 10% compared to the S&P 500's 2.2% increase.

Ross, alongside TJX, is among the stocks with the most crowded "longs" in so-called softline retail, or those companies that sell textile-based merchandise such as apparel and linens, analysts at UBS said in a recent note.

The stock's performance and the longs are data points "consistent with our conversations with investors which indicate bullish sentiment," the UBS analysts said.

-Claudia Assis

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11-20-25 2016ET