Ross Stores Faces Significant Stock Decline Amid Economic Challenges
Dublin, California-based Ross Stores, Inc. (ROST) operates home fashion and off-price retail apparel stores. The company has a market capitalization of $43.6 billion and provides apparel, accessories, footwear, and home fashion products through its U.S. outlets.
As a company with a market cap exceeding $10 billion, Ross Stores is considered a “large-cap stock.” This classification underscores its substantial size and influence within the apparel retail sector.
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Despite these strengths, Ross Stores’ stock has declined 21.4% from its all-time high of $163.60, reached on August 23, 2024. Over the last three months, ROST has fallen 16.4%, slightly outperforming the Consumer Discretionary Select Sector SPDR Fund (XLY), which dropped 17% in the same period.
Looking at a longer timeframe, ROST’s performance appears even less favorable. The stock has decreased by 14.9% over the past six months and by 11.8% over the last 52 weeks, severely lagging behind XLY’s 3.9% gains in the last six months and 9.2% returns over the past year.
Since early February, ROST has consistently traded below its 200-day moving average and largely below its 50-day moving average since late January, with occasional fluctuations indicating instability.
After releasing its mixed Q4 results on March 4, Ross Stores’ stock rose nearly 2%. The company reported a 3% year-over-year growth in comparable store sales. However, the comparison period last year included 14 weeks, one more than the most recent quarter, which resulted in a 1.8% decline in overall revenue to $5.9 billion, falling slightly short of market expectations. Net earnings also slipped by 3.8% to $586.8 million, yet the earnings per share (EPS) of $1.79 surpassed consensus estimates by 8.5%.
While Ross Stores benefited from holiday shopping in Q4, sales have begun to decline in early 2025 due to unpredictable weather and a challenging macro environment. Consequently, the company anticipates comparable sales for Q1 2025 to be flat or down as much as 3%. Improvement in sales is anticipated in subsequent quarters.
In comparison, Ross Stores has notably underperformed its peer, The TJX Companies, Inc. (TJX), which saw a 1.5% dip over the past six months but a remarkable 20.4% gain over the past year.
On a positive note, analysts maintain a cautious optimism regarding Ross Stores. It holds a consensus “Moderate Buy” rating among the 21 analysts assessing the stock, with a mean price target of $161.53 suggesting a potential upside of 25.6% from current prices.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the mentioned securities. All information and data provided in this article are for informational purposes only. For further details, please view the Barchart Disclosure Policy here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
