Skip to Content
Morningstar
Get 14 Days Free

Ross Stores Inc ROST

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Ross’ Solid Quarter Suggests Off-Price’s Appeal Endures, but Near-Term Should Be Choppy; Shares Rich

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Our $88 per share valuation of narrow-moat Ross should rise by a mid-single-digit percentage after it saw better third-quarter results than we had expected. Still, the near term carries much risk, and while we continue to expect mid-single-digit percentage top-line growth and low-teens operating margins long term, we suggest prospective investors await a larger margin of safety.

Read Full Analysis

Company Profile

Business Description

Ross Stores is a leading American off-price apparel and home fashion retailer, operating over 1,800 stores (at the end of fiscal 2019) across the Ross Dress for Less and dd's Discounts banners. Ross offers a variety of name-brand products and targets undercutting conventional retailers' regular prices by 20%-70%. The company uses an opportunistic, flexible merchandising approach; together with a relatively low-frills shopping environment centered on a treasure-hunt experience, Ross maximizes inventory turnover and traffic, enabling its low-price approach. In fiscal 2019, 26% of sales came from the ladies' department, 25% from home accents (including bed and bath), 14% from men’s, 13% from each of accessories and shoes, and 9% from children's. All sales were made in the United States.

Contact
5130 Hacienda Drive
Dublin, CA, 94568-7579
T +1 925 965-4400
Sector Consumer Cyclical
Industry Apparel Retail
Most Recent Earnings Oct 31, 2020
Fiscal Year End Feb 1, 2021
Stock Type Cyclical
Employees 92,500

Related

Stock Strategist Industry Reports
Off-Price Retailers Fall Victim to COVID-19, but Long-Term Prognosis Good
Chains' recovery will eventually come; in the meantime, check out the full-price sale.
Zain Akbari
Commentary
The Week Ahead: Earnings From Home Depot, Target, Salesforce, and More
Consumer retail and software companies report earnings next week.
Charlotte Frank
Stock Strategist Industry Reports
How Bricks Compete With Clicks in a New Retail Era
Some retailers are better equipped to fight the Amazon threat.
Zain Akbari
Stock Strategist
Nordstrom Overcomes Department Store Woes
Strong e-commerce and Rack stores set it apart.
David Swartz
US Videos
Our Top Retail Picks for Holiday Shopping
We expect a strong holiday selling period, with Amazon and Mattel among our favorites.
R.J. Hottovy
Advisor Insights
Dressing for an Amazonian Storm
Apparel companies brace for competition.
Laura Lallos
Our Picks
20 Undervalued, Sustainable Stocks
These stocks are positioned to outperform their peers, and they also score well on environmental, social, and governance metrics.
Karen Wallace
Quarter-End Insights
Consumer Cyclical: Market Underestimating Apparel and E-Commerce
Structural trends across apparel retail, e-commerce, and travel are being mispriced by the market.
R.J. Hottovy
Stock Strategist
Gap's Moat Is Gone
We no longer think the iconic brand holds enough pricing power for a competitive advantage.
Bridget Weishaar
Stock Strategist Industry Reports
Is Traditional Apparel Retailing Dead?
No, says analyst Bridget Weishaar, but it will look much different in the future.
Bridget Weishaar
Stock Strategist
Consumer Cyclical: China Growth Concerns Present Buying Opportunities
The market is now pricing in long-term cash flow assumptions that are more conservative than those baked into our longer-term consumer cyclical valuation assumptions.
Dan Wasiolek
Stock Strategist
Has Macy's Lost Its Magic?
Short-term cash drivers do not address long-term competitive problems.
Bridget Weishaar
Stock Strategist Industry Reports
How Will 3-D Printing Affect the Apparel Industry?
It could eventually be a disruptive technology, but it has some barriers to clear first.
Bridget Weishaar
Quarter-End Insights
Consumer Cyclical: Consumer Volatility Creates Investment Opportunities
The market now appears to be pricing in more conservative long-term cash flow assumptions than baked into our longer-term consumer cyclical valuations.
Bridget Weishaar
Stock Strategist
Discount Apparel Retailer's Stock Looking Good at These Prices
We think Ross is perfectly positioned to gain market share with its brand-name merchandise at a discount.
Bridget Weishaar
Investing Specialists
10 High-Conviction Purchases by the Ultimate Stock-Pickers
Top managers continue to exercise a lot of patience as they look for buying opportunities in a U.S. equity market that has risen close to 40% since the start of 2013.
The Morningstar Ultimate Stock-Pickers Team
Stock Strategist
First-Quarter Weakness Makes This Retail Stock an Attractive Buy
While the market overreacts to low first-quarter comps and EPS thrown off by foreign exchange rates, we continue to believe that TJX is best in class.
Bridget Weishaar
Quarter-End Insights
Our Outlook for Consumer Cyclical Stocks
The consumer shift to e-commerce is becoming more pronounced, but retailers are fighting back.
R.J. Hottovy
Investing Specialists
10 New-Money Purchases by Our Ultimate Stock-Pickers
There has been more breadth than depth in the high-conviction and new-money purchases that we've seen so far from our top managers, even with the increase in investor inflows in early part of 2013.
The Morningstar Ultimate Stock-Pickers Team
Investing Specialists
Cliff Crisis Averted, but Don't Get Too Comfy
Part of the so-called fiscal cliff was avoided, but the economy will still feel related headwinds in the first quarter, and more skirmishes loom.
Robert Johnson, CFA