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Ross Stores on Track With Store Expansions, Inaugurates 47 Locations

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Ross Stores, Inc. (ROST - Free Report) has been expanding its foothold by introducing stores and extending its capabilities. The company has concluded its store expansion plans for fiscal 2024 by introducing 47 stores recently. These new stores are likely to capture extra sales and boost ROST’s overall profits.

Let’s delve deeper.

ROST’s Latest Stores Boost Sales

The company has inaugurated 43 Ross Dress for Less (Ross) and four dd's DISCOUNTS outlets in 22 states this September and October. Including the latest openings, ROST has added 89 new stores in the fiscal year. Together, Ross Dress for Less and dd's DISCOUNTS currently operate a total of 2,192 locations in 43 states, the District of Columbia and Guam.

Ross Stores has been reinforcing its presence across both the existing and new markets. The company inaugurated Ross Dress for Less stores in Minnesota, New York and Pennsylvania, alongside enhancing its footprint in the sunbelt states. It also opened dd’s stores in California, Florida, New Mexico and Texas. 

Ross Stores had earlier raised its store expansion targets over the long term. Management expects to expand “Ross Dress for Less” to 2,900 stores and dd’s DISCOUNTS to 700 stores. The aforesaid openings highlight Ross Stores’ efforts to expand stores are quite on track. This also reflects the company's continued expansion strategy. Store expansions have also been driving comparable-store sales (comps) as well. Our model expects ROST’s comparable sales growth to be 2.1% year over year for the third quarter and 2.6% for the fourth quarter of fiscal 2024. 

Ross Stores’ consistent execution of store expansions over the years has been appealing. During the most recent quarter, the company inaugurated 21 New Rock and three dd's DISCOUNT stores. As of Oct. 21, 2024, Ross Stores operated 2,192 outlets, including 1,836 Ross stores across 43 states, the District of Columbia and Guam, and 356 dd’s DISCOUNTS stores in 22 states.

Ross Stores’ Other Strengths

ROST’s off-price model has been gaining traction too. The company operates a chain of off-price retail apparel and home accessories stores, which target value-conscious men and women. It 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.

 

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Ross Stores continues to gain from positive customer response for its merchandise across both banners. In second-quarter fiscal 2024, comps improved 4%, mostly attributed to higher customer traffic and increased basket size, indicating that more shoppers visited Ross Stores during the quarter and purchased more items per visit. This led to a sales improvement of 7% year over year and earnings per share (EPS) growth of 20.5% in the reported quarter. This Zacks Rank #2 (Buy) company also delivered the fifth straight quarter of bottom and top-line beat in the fiscal second quarter.

Shares of this apparel and accessories dealer have gained 9.9% compared with the industry’s 12.8% growth in the past six months.

More Key Picks

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

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 7.1%, on average. 

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS indicates growth of 12% and 10.5%, respectively, from the year-ago figures.

Abercrombie, a leading casual apparel retailer, presently flaunts a Zacks Rank of 1. ANF delivered an earnings surprise of 16.8% in the last reported quarter. 

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

Deckers, a footwear and accessories dealer, currently carries a Zacks Rank of 2. DECK delivered an average earnings surprise of 47.2% in the trailing four quarters.

The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 11.8% from the year-ago figure.

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