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Ross Stores Inc ROST

Morningstar Rating
$146.48 +1.60 (1.10%)
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Company Report

Ross’ Procurement Scale and Vendor Network Help Cement Wide Moat in the Off-Price Channel

As the second-largest off-price retailer in the U.S. with about 30% market share, we believe Ross Stores’ unique inventory procurement method and scale positions the firm to comfortably expand its top line at a mid-single-digit pace while fending off competition from online channels in future. We suggest that Ross’ standing as a reliable sales outlet for product manufacturers and traditional (or full-price) retailers looking to discretely liquidate excess inventory should provide the firm with an abundant assortment of buying opportunities. Ross consistently stocks its more than 2,100 stores with a wide assortment of branded merchandise at bargain prices due to its plentiful vendor relationships and meticulous inventory management.

Price vs Fair Value

ROST is trading at a 33% premium.
Price
$144.82
Fair Value
$521.00
Uncertainty
Medium
1-Star Price
$839.49
5-Star Price
$85.30
Economic Moat
Vwn
Capital Allocation
Mknwbzv

Bulls Say, Bears Say

Bulls

Ross is a reliable store to find bargain merchandise and will therefore benefit if consumers grow increasingly value-conscious due to economic uncertainty.

Bears

Product availability will be limited in future years if merchandisers reduce their off-price retail exposure, weighing on the attractiveness of Ross’ product assortment.

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News

Trading Information

Previous Close Price
$144.88
Day Range
$145.17146.60
52-Week Range
$99.28146.60
Bid/Ask
$146.43 / $146.56
Market Cap
$49.29 Bil
Volume/Avg
219,211 / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
28.61
Price/Sales
2.50
Dividend Yield (Trailing)
0.93%
Dividend Yield (Forward)
0.93%
Total Yield
2.95%

Company Profile

Ross Stores operates as an off-price apparel and accessories retailer with the majority of its sales derived from its Ross Dress for Less banner. The firm opportunistically procures excess brand-name merchandise made available via manufacturing overruns and retail liquidation sales at a 20%-60% discount to full prices. As such, its stores are frequently filled with a vast array of stock-keeping units, each with minimal product depth that creates a treasure hunt shopping experience. The firm’s more than 1,750 Ross Dress for Less stores are primarily located in densely populated suburban communities and typically serve middle-income consumers. Ross also operates nearly 350 DD's Discounts chains that target lower-income shoppers.
Sector
Consumer Cyclical
Industry
Apparel Retail
Stock Style Box
Mid Growth
Total Number of Employees
101,000

Competitors

Valuation

Metric
ROST
M
TJX
Price/Earnings (Normalized)
28.616.8227.53
Price/Book Value
10.621.2716.22
Price/Sales
2.500.222.16
Price/Cash Flow
21.723.0321.08
Price/Earnings
ROST
M
TJX

Financial Strength

Metric
ROST
M
TJX
Quick Ratio
1.060.110.43
Current Ratio
1.701.181.19
Interest Coverage
27.666.5166.55
Quick Ratio
ROST
M
TJX

Profitability

Metric
ROST
M
TJX
Return on Assets (Normalized)
13.30%4.69%14.72%
Return on Equity (Normalized)
41.75%20.19%66.82%
Return on Invested Capital (Normalized)
17.00%9.07%21.84%
Return on Assets
ROST
M
TJX
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