Ross Stores, Inc. ROST has been benefiting from initiatives, including store expansion plans and its off-price retailing model. It has been offering branded and designer goods at discounted prices. This has helped it maintain customer loyalty and adapt to changing consumer preferences. ROST has been expanding its foothold by introducing stores and extending its capabilities. 

Let’s delve deeper.

ROST’s Solid Strategies Boost Sales

Ross Stores’ consistent execution of store expansions over the years is quite appealing. The company has concluded its store expansion plans for fiscal 2024 by opening 47 stores. These new stores are likely to capture extra sales and boost overall profits. ROST has been expanding its foothold by introducing stores and extending its capabilities. 

Ross Stores has been reinforcing its presence across both the existing and new markets. The aforesaid openings highlight its efforts to expand stores are quite on track. This also indicates the company's continued expansion strategy. Management expects to expand “Ross Dress for Less” to 2,900 stores and dd’s DISCOUNTS to 700 stores in the long term.

In addition, the company operates a chain of off-price retail apparel and home accessories stores, which targets value-conscious shoppers. ROST has a proven business model as the competitive bargains it offers continue to make its stores attractive destinations for customers. 

The off-price model offers a strong value proposition and micro-merchandising that drive better product allocation and margins. Ross Stores continues to gain from positive customer response for its merchandise across both banners.

ROST Stock’s Valuation

Ross Stores stock is trading at an appealing valuation relative to the industry. Going by the price/earnings ratio, the stock is currently trading at 22.37 on a forward 12-month basis, lower than 30.37 for the industry. Also, the stock is trading lower than its high of 26.70.

Image Source: Zacks Investment Research

Final Words on ROST

The aforementioned tailwinds have been bolstering ROST’s comparable-store sales, which rose 1% in the third quarter of fiscal 2024 on increased customer traffic and basket size. This indicates that a higher number of shoppers visited Ross Stores and purchased more items per visit. This led to a sales improvement of 7% year over year in the same quarter.

Analysts seem quite optimistic about the company. For fiscal 2025, the Zacks Consensus Estimate for ROST’s sales and EPS implies growth of 5.6% and 8.2%, respectively, year over year.

Shares of this apparel and accessories dealer have gained 5.7% compared with the industry’s 8.4% growth in the past six months. ROST currently carries a Zacks Rank #2 (Buy).

Other Solid Picks From the Industry

We have highlighted three other top-ranked stocks, namely Deckers DECK, Boot Barn BOOT and Abercombie ANF.

Deckers, a footwear and accessories dealer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 13.6% from the year-ago figure. DECK delivered an average earnings surprise of 41.1% in the trailing four quarters.

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 6.8%, on average. 

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales indicates growth of 13.4% from the year-ago figure.

Abercrombie, a leading casual apparel retailer, currently carries a Zacks Rank of 2. ANF delivered an earnings surprise of 16.8% in the last reported quarter. 

The consensus estimate for Abercrombie’s current financial-year sales indicates growth of 13% from the year-ago figure.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Ross Stores, Inc. (ROST) : Free Stock Analysis Report

Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research