Group 1 - Ross Stores closed at $141.27, reflecting a -0.61% change from the previous day, underperforming the S&P 500's gain of 0.03% [1] - Over the past month, shares of Ross Stores have decreased by 5.97%, while the Retail-Wholesale sector gained 9.07% and the S&P 500 gained 4.19% [1] - The upcoming earnings report is projected to show earnings of $1.65 per share, a year-over-year decline of 9.34%, with quarterly revenue expected at $5.92 billion, down 1.77% from the previous year [2] Group 2 - Recent modifications to analyst estimates for Ross Stores are important, as they reflect short-term business trends and analyst optimism [3] - Positive estimate revisions correlate with stock price performance, and investors can utilize the Zacks Rank for actionable insights [4] - The Zacks Rank system has a strong track record, with stocks rated 1 producing an average annual return of +25% since 1988; currently, Ross Stores has a Zacks Rank of 2 (Buy) [5] Group 3 - Ross Stores has a Forward P/E ratio of 21.28, which is a premium compared to its industry's Forward P/E of 19.61; the PEG ratio is 2.17, slightly above the industry average of 2.12 [6] - The Retail - Discount Stores industry is part of the Retail-Wholesale sector, holding a Zacks Industry Rank of 39, placing it in the top 16% of over 250 industries [7]

Group 1 - Ross Stores, Inc. (NASDAQ: ROST) is favored in the retail sector due to its ability to perform well in both strong and weak market conditions by targeting lower-income consumers with off-price brand-name products [1] - The company is characterized by disciplined capital allocation and exceptional returns on capital, which allows it to compound invested capital over long periods [1]

Core Insights - Ross Stores, Inc. (ROST) is benefiting from store expansion plans and an off-price retailing model, offering branded goods at discounted prices to maintain customer loyalty and adapt to consumer preferences [1][4] Store Expansion and Strategy - ROST has successfully opened 47 new stores in fiscal 2024, which is expected to enhance sales and profits [2] - The company aims to expand "Ross Dress for Less" to 2,900 stores and dd's DISCOUNTS to 700 stores in the long term, reinforcing its presence in both existing and new markets [3] Business Model and Customer Response - ROST operates off-price retail apparel and home accessories stores targeting value-conscious shoppers, which has proven to be an attractive model [4] - The off-price model provides a strong value proposition and effective product allocation, leading to positive customer responses across its merchandise [4] Financial Performance - Comparable-store sales rose 1% in Q3 of fiscal 2024, driven by increased customer traffic and larger basket sizes, resulting in a 7% year-over-year sales improvement [6] - The stock is trading at a price/earnings ratio of 22.37, lower than the industry average of 30.37, indicating an appealing valuation [5] Future Growth Expectations - Analysts project a sales growth of 5.6% and an EPS growth of 8.2% for fiscal 2025, reflecting optimism about ROST's future performance [7] - Over the past six months, ROST shares have gained 5.7%, compared to the industry's 8.4% growth [8]

Company Performance - Ross Stores (ROST) closed at $149.79, with a daily increase of +0.57%, underperforming the S&P 500's gain of 0.61% [1] - Over the past month, ROST shares declined by 1.02%, lagging behind the Retail-Wholesale sector's increase of 2.32% and the S&P 500's gain of 2.08% [1] Earnings Expectations - The upcoming earnings report is anticipated to show an EPS of $1.65, reflecting a decrease of 9.34% from the same quarter last year [2] - The Zacks Consensus Estimate projects net sales of $5.92 billion, down 1.77% year-over-year [2] Full Year Projections - For the full year, analysts expect earnings of $6.17 per share and revenue of $21.13 billion, indicating increases of +10.97% and +3.71% respectively from the previous year [3] Analyst Sentiment - Recent changes in analyst estimates for Ross Stores are crucial as they indicate near-term business trends, with positive revisions suggesting optimism about the company's profitability [3][4] Zacks Rank and Valuation - Ross Stores currently holds a Zacks Rank of 2 (Buy), with a historical average annual return of +25% for stocks rated 1 since 1988 [5] - The company has a Forward P/E ratio of 24.12, which is higher than the industry average of 20.63 [6] Growth Metrics - The PEG ratio for Ross Stores is 2.46, compared to the industry average PEG ratio of 2.35, indicating a premium valuation relative to expected earnings growth [7] Industry Context - The Retail - Discount Stores industry ranks in the top 11% of all industries, with a Zacks Industry Rank of 27, suggesting strong performance potential [8]

Core Points - Ross Stores, Inc. has pledged $850,000 in donations to support disaster relief efforts for the California wildfires, aiding organizations like the American Red Cross and the Los Angeles Regional Food Bank [1][2] - The company is also facilitating customer donations to the Red Cross at its store registers from January 16th to January 26th, 2025, across its locations in Southern California [2] - Ross Stores operates 1,836 Ross Dress for Less locations and 356 dd's DISCOUNTS stores, with fiscal 2023 revenues reported at $20.4 billion [3] Company Overview - Ross Stores, Inc. is a major player in the off-price retail sector, offering significant savings on brand-name apparel and home fashion [3] - The company has a long-standing presence in California, having launched its off-price business there approximately 43 years ago [2] - Ross Stores provides discounts ranging from 20% to 60% off regular prices at Ross Dress for Less and 20% to 70% off at dd's DISCOUNTS [3]

Company Performance - Ross Stores (ROST) closed at $151.74, reflecting a -1.87% change from the previous day, underperforming the S&P 500's loss of 1.54% [1] - The stock has increased by 0.49% over the past month, while the Retail-Wholesale sector has declined by 4.27% and the S&P 500 by 2.2% [1] Upcoming Earnings - The upcoming earnings disclosure is anticipated, with an expected EPS of $1.65, indicating a 9.34% decline year-over-year [2] - Projected net sales are $5.92 billion, down 1.77% from the same quarter last year [2] Annual Estimates - For the annual period, earnings are estimated at $6.17 per share and revenue at $21.13 billion, representing increases of +10.97% and +3.71% respectively from the previous year [3] - Monitoring analyst projections is advised, as positive revisions can indicate a favorable business outlook [3] Zacks Rank and Valuation - Ross Stores currently holds a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 25.04, which is higher than the industry average of 21.37 [5] - The PEG ratio stands at 2.56, compared to the industry average of 2.29 [6] Industry Context - The Retail - Discount Stores industry is part of the Retail-Wholesale sector and has a Zacks Industry Rank of 177, placing it in the bottom 30% of over 250 industries [7] - Strong individual industry groups, as measured by the Zacks Industry Rank, tend to outperform weaker groups by a factor of 2 to 1 [7]

Stock Performance - Ross Stores Inc (ROST) stock gained 9 9% in the past three months outperforming the Retail-Wholesale sector growth of 6 5% and the Zacks Retail - Discount Stores industry growth of 3 6% [1] - ROST shares also surpassed the S&P 500 index's rise of 3 6% [1] Growth Strategies - The company benefits from store-expansion plans and its off-price retailing model offering branded and designer goods at discounted prices [2] - Ross Stores concluded its store-expansion plans for fiscal 2024 by opening 47 stores which are expected to capture extra sales and boost overall profits [4] - Management expects to expand "Ross Dress for Less" to 2 900 stores and dd's DISCOUNTS to 700 stores in the long term [5] - The off-price model offers a strong value proposition and micro-merchandising driving better product allocation and margins [7] Financial Estimates - The Zacks Consensus Estimate for Ross Stores' fiscal 2024 earnings per share (EPS) has risen 0 8% to $6 17 in the past 60 days [8] - The consensus estimate for fiscal 2025 EPS has risen 0 3% to $6 67 in the past seven days [8] - For fiscal 2024 the Zacks Consensus Estimate for ROST sales and EPS implies growth of 3 7% and 11% respectively year over year [9] - For fiscal 2025 the consensus mark for sales and EPS indicates a 5 6% and 8 1% year-over-year increase respectively [9] Valuation - Ross Stores stock is trading at a forward 12-month price/earnings ratio of 23 27 lower than the industry's 30 33 [11] - The stock is trading lower than its high of 79 52 [11] Challenges - Ross Stores has been witnessing higher costs and macroeconomic volatility including rising inflation and geopolitical uncertainty [12] - The cost of goods sold is predicted to increase 2 8% year over year for fiscal 2024 [12] - Selling general and administrative expenses are expected to increase 5 7% year over year for the fiscal fourth quarter and 4% for fiscal 2024 [12] - Management envisions earnings per share to be in the bracket of $1 57-$1 64 for fourth-quarter fiscal 2024 down from $1 82 in fourth-quarter fiscal 2023 [13] Comparable Store Sales - Comparable store-sales (comps) rose 1% in the third quarter of fiscal 2024 driven by increased customer traffic and basket size [15] - This led to a sales increase of 3% year over year in the same quarter [15] Industry Picks - Deckers (DECK) sports a Zacks Rank 1 (Strong Buy) with current financial-year sales growth estimated at 13 6% and an average earnings surprise of 41 1% in the trailing four quarters [16] - Boot Barn (BOOT) carries a Zacks Rank 2 (Buy) with current financial-year sales growth estimated at 13 4% and a trailing four-quarter earnings surprise of 6 8% on average [17] - Abercrombie (ANF) carries a Zacks Rank of 2 with current financial-year sales growth estimated at 13% and an earnings surprise of 16 8% in the last reported quarter [18][20]

Core Viewpoint - Ross Stores, Inc. (ROST) is identified as an attractive value opportunity in the Retail - Discount Stores industry, trading at a forward price-to-earnings ratio of 22.8, which is below the industry average of 31.71x and the Retail-Wholesale average of 25.77x, indicating it is undervalued compared to peers [1] Financial Performance - ROST stock is currently priced at $150.85, reflecting a 7.8% discount from its 52-week high of $163.60 reached on August 23, 2024 [2] - The stock is trading above its 200-day and 50-day moving averages of $143.52 and $146.19, respectively, indicating a sustained upward trend [2] - In the past month, ROST recorded growth of 8.6%, outperforming the broader Retail-Wholesale sector's return of 7.4% and the Zacks Retail - Discount Stores industry's growth of 3.9% [5] Sales and Growth Drivers - ROST experienced a 1% improvement in comparable store sales in the third quarter of fiscal 2024, driven by increased customer traffic and larger basket sizes, leading to a 3% year-over-year sales growth [8] - The company's business model emphasizes competitive bargains, making its stores appealing across various economic conditions, and its off-price model optimizes product allocation and improves margins [9][10] - Ross Stores plans to expand "Ross Dress for Less" to 2,900 stores and dd's DISCOUNTS to 700 stores, reflecting a consistent execution of its store expansion strategy [11] Earnings Estimates - Analysts have revised their EPS estimates upward, with fiscal 2024 and 2025 estimates increased by 1% to $6.17 and 0.8% to $6.67 per share, respectively, indicating expected year-over-year growth rates of approximately 10.9% and 8.1% [12] Future Outlook - For the fourth quarter of fiscal 2024, Ross Stores anticipates a more moderate growth trajectory, expecting comps growth of 2-3% compared to 7% in the prior year, with EPS projected to be $1.35-$1.41, down from $1.82 [14] - The company has been facing higher costs, with COGS increasing by 1.9% year over year in the third quarter, and SG&A expenses rising by 2.8% year over year [15]

Sales Performance - Sales for the three-month period ended November 2, 2024, increased by $146.5 million, or 3.0%, compared to the same period in 2023, primarily due to the opening of 80 net new stores and a 1% comparable store sales increase [81]. - For the nine-month period ended November 2, 2024, sales increased by $862.5 million, or 6.0%, driven by the opening of 80 net new stores and a 3% comparable store sales increase [81]. Cost of Goods Sold - The cost of goods sold for the three-month period ended November 2, 2024, increased by $70.0 million, while for the nine-month period, it increased by $490.6 million, primarily due to higher sales from new store openings [84]. - Cost of goods sold as a percentage of sales for the three-month period ended November 2, 2024, decreased by approximately 70 basis points compared to the same period in 2023, mainly due to lower buying and distribution costs [85]. Expenses - Selling, general and administrative expenses (SG&A) increased by $22.4 million for the three-month period and by $80.9 million for the nine-month period ended November 2, 2024, primarily due to the opening of new stores [88]. Earnings - Net earnings as a percentage of sales for the three-month period ended November 2, 2024, were 9.6%, up from 9.1% in the same period in 2023, attributed to lower cost of goods sold and SG&A expenses [94]. - Diluted earnings per share for the three-month period ended November 2, 2024, was $1.48, a 11.3% increase from $1.33 for the same period in 2023 [96]. - For the nine-month period ended November 2, 2024, diluted earnings per share increased to $4.53, up 21.1% from $3.74 in the prior year [96]. - The increase in diluted earnings per share for the three-month period was driven by a 9% increase in net earnings and a 2% reduction in weighted-average diluted shares outstanding due to stock repurchases [97]. Cash Flow - Net cash provided by operating activities was $1.5 billion for the nine-month period ended November 2, 2024, down from $1.6 billion in the same period last year [100]. - Cash used in investing activities decreased to $514.1 million for the nine-month period ended November 2, 2024, compared to $540.5 million in the prior year [106]. - Net cash used in financing activities increased to $1.5 billion for the nine-month period ended November 2, 2024, from $1.1 billion in the same period last year, primarily due to stock repurchases [109]. - As of November 2, 2024, the company had $4.3 billion of unrestricted cash balances and $1.3 billion available under its Credit Facility [116]. - The company repurchased 5.5 million shares of common stock for $787.5 million during the nine-month period ended November 2, 2024 [112]. Capital Expenditures - Capital expenditures for fiscal 2024 are projected to be approximately $760 million, focusing on new store openings and improvements [108]. Inventory - Packaway inventory was 38% of total inventory as of November 2, 2024, down from 40% at the end of fiscal 2023 [105]. Leadership Changes - The company appointed James G. Conroy as the new CEO, effective February 2, 2025, succeeding Barbara Rentler [76]. Tax Rate - The effective tax rate for the three and nine-month periods ended November 2, 2024, was approximately 24%, compared to 25% for the same periods in 2023 [93].

Core Viewpoint - The analyst maintains a hold rating on Ross Stores (NASDAQ: ROST) despite a positive outlook for same-store sales (SSS) growth, indicating that the current valuation is not attractive [1]. Group 1: Company Analysis - The analyst previously covered Ross Stores on September 17, 2024, and expressed concerns about the attractiveness of its valuation [1]. - There is an expectation for SSS growth to accelerate, but this has not changed the hold rating [1]. Group 2: Investment Approach - The analyst employs a diverse investment strategy that includes fundamental, technical, and momentum investing, utilizing the strengths of each approach to refine the investment process [1]. - The purpose of writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors [1].