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Ross Stores (ROST) Up 3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Ross Stores (ROST - Free Report) . Shares have added about 3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ross Stores due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Ross Stores, Inc. before we dive into how investors and analysts have reacted as of late.
Ross Stores' Q4 Earnings & Sales Beat Estimates
Ross Stores reported fourth-quarter fiscal 2025 results, with earnings and sales surpassing the Zacks Consensus Estimate. Net sales and earnings per share also increased from the prior-year period.
Ross Stores posted earnings of $2.00 per share, exceeding the Zacks Consensus Estimate of $1.88 and well above the company’s guidance of $1.77 to $1.85. Excluding a gain of 14 cents per share from the 2024 packaway facility sale, earnings per share rose 21%.
Total sales reached $6.64 billion, rising 12% year over year and beating the Zacks Consensus Estimate of $6.4 billion. Comparable store sales (comps) improved 9% year over year. Results benefited from compelling, well-curated holiday assortments in its stores, stronger customer engagement driven by new marketing campaigns, and well-executed in-store initiatives that elevated the overall shopping experience.
Insight Into ROST’s Q4 Performance
Cost of goods sold (COGS) rose 11.2% year over year to $4.8 billion. COGS, as a percentage of sales, declined 65 basis points (bps) year over year.
SG&A expenses increased 18.2% year over year to $990.1 million and rose 75 bps, as a percentage of sales, due to the prior-year gain from the packaway facility sale. Excluding this impact, SG&A declined 30 bps, reflecting improved expense discipline.
The company’s operating income rose 11.4% year over year to $$814.1 million, with the operating margin contracting 10 bps to 12.6%, including a 105-bps benefit from the sale of a packaway facility.
Sneak Peek Into ROST’s Other Financials
Ross Stores ended fiscal 2025 with cash and cash equivalents of $4.6 billion, after funding business growth and capital requirements. The company has a long-term debt of $1.02 billion and a total shareholders’ equity of $6.2 billion.
Consolidated inventories increased 8% year over year, with packaway accounting for 37% of the total inventory, down from 41% in the prior year. Management remains encouraged by the improved composition and confident in its year-end inventory position.
In the fiscal fourth quarter, Ross Stores repurchased 1.5 million shares for an aggregate cost of $262 million. In fiscal 2025, the company repurchased 7.1 million shares for $1.05 billion, completing its planned two-year share repurchase program. The company approved a two-year $2.55 billion share repurchase authorization for fiscal 2026 and 2027, marking a 21% increase from $2.1 billion in common stock repurchased across fiscal 2024 and 2025.
What ROST Expects for FY26
The company exited the fiscal fourth quarter with solid momentum and is encouraged by a very strong start to the Spring season. For first-quarter fiscal 2026, the company projects comps to increase 7-8%, with total sales estimated to increase 10-12% year over year. Assuming performance aligns with this outlook, the fiscal first-quarter earnings per share are expected to be $1.60-$1.67 compared with $1.47 in the quarter ended May 3, 2025.
For first-quarter fiscal 2026, the operating margin is expected to be 11.8-12.1% compared with 12.2% in the prior-year period. The anticipated decline primarily reflects higher distribution center costs associated with the facility opened in the second quarter of fiscal 2025, as well as unfavorable timing of packaway-related expenses. The company also expects higher incentive compensation versus fiscal 2025, when results fell short of plan. Partially offsetting these headwinds, the company anticipates an improvement in the merchandise margin.
For fiscal 2026, ROST expects comps growth of 3-4%, with total sales anticipated to increase 5-7%. The company projects earnings per share of $7.02-$7.36 compared with $6.61 in fiscal 2025. Assuming comps perform in line with its outlook, the company expects the operating margin to improve to 12-12.3% from the 11.9% reported in fiscal 2025. This projection reflects anticipated gains in merchandise margin and lower distribution costs throughout the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Ross Stores has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ross Stores has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Ross Stores belongs to the Zacks Retail - Discount Stores industry. Another stock from the same industry, TJX (TJX - Free Report) , has gained 0.2% over the past month. More than a month has passed since the company reported results for the quarter ended January 2026.
TJX reported revenues of $17.74 billion in the last reported quarter, representing a year-over-year change of +8.5%. EPS of $1.43 for the same period compares with $1.23 a year ago.
TJX is expected to post earnings of $1.00 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
TJX has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Ross Stores (ROST) Up 3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ross Stores (ROST - Free Report) . Shares have added about 3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ross Stores due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Ross Stores, Inc. before we dive into how investors and analysts have reacted as of late.
Ross Stores' Q4 Earnings & Sales Beat Estimates
Ross Stores reported fourth-quarter fiscal 2025 results, with earnings and sales surpassing the Zacks Consensus Estimate. Net sales and earnings per share also increased from the prior-year period.
Ross Stores posted earnings of $2.00 per share, exceeding the Zacks Consensus Estimate of $1.88 and well above the company’s guidance of $1.77 to $1.85. Excluding a gain of 14 cents per share from the 2024 packaway facility sale, earnings per share rose 21%.
Total sales reached $6.64 billion, rising 12% year over year and beating the Zacks Consensus Estimate of $6.4 billion. Comparable store sales (comps) improved 9% year over year. Results benefited from compelling, well-curated holiday assortments in its stores, stronger customer engagement driven by new marketing campaigns, and well-executed in-store initiatives that elevated the overall shopping experience.
Insight Into ROST’s Q4 Performance
Cost of goods sold (COGS) rose 11.2% year over year to $4.8 billion. COGS, as a percentage of sales, declined 65 basis points (bps) year over year.
SG&A expenses increased 18.2% year over year to $990.1 million and rose 75 bps, as a percentage of sales, due to the prior-year gain from the packaway facility sale. Excluding this impact, SG&A declined 30 bps, reflecting improved expense discipline.
The company’s operating income rose 11.4% year over year to $$814.1 million, with the operating margin contracting 10 bps to 12.6%, including a 105-bps benefit from the sale of a packaway facility.
Sneak Peek Into ROST’s Other Financials
Ross Stores ended fiscal 2025 with cash and cash equivalents of $4.6 billion, after funding business growth and capital requirements. The company has a long-term debt of $1.02 billion and a total shareholders’ equity of $6.2 billion.
Consolidated inventories increased 8% year over year, with packaway accounting for 37% of the total inventory, down from 41% in the prior year. Management remains encouraged by the improved composition and confident in its year-end inventory position.
In the fiscal fourth quarter, Ross Stores repurchased 1.5 million shares for an aggregate cost of $262 million. In fiscal 2025, the company repurchased 7.1 million shares for $1.05 billion, completing its planned two-year share repurchase program. The company approved a two-year $2.55 billion share repurchase authorization for fiscal 2026 and 2027, marking a 21% increase from $2.1 billion in common stock repurchased across fiscal 2024 and 2025.
What ROST Expects for FY26
The company exited the fiscal fourth quarter with solid momentum and is encouraged by a very strong start to the Spring season. For first-quarter fiscal 2026, the company projects comps to increase 7-8%, with total sales estimated to increase 10-12% year over year. Assuming performance aligns with this outlook, the fiscal first-quarter earnings per share are expected to be $1.60-$1.67 compared with $1.47 in the quarter ended May 3, 2025.
For first-quarter fiscal 2026, the operating margin is expected to be 11.8-12.1% compared with 12.2% in the prior-year period. The anticipated decline primarily reflects higher distribution center costs associated with the facility opened in the second quarter of fiscal 2025, as well as unfavorable timing of packaway-related expenses. The company also expects higher incentive compensation versus fiscal 2025, when results fell short of plan. Partially offsetting these headwinds, the company anticipates an improvement in the merchandise margin.
For fiscal 2026, ROST expects comps growth of 3-4%, with total sales anticipated to increase 5-7%. The company projects earnings per share of $7.02-$7.36 compared with $6.61 in fiscal 2025. Assuming comps perform in line with its outlook, the company expects the operating margin to improve to 12-12.3% from the 11.9% reported in fiscal 2025. This projection reflects anticipated gains in merchandise margin and lower distribution costs throughout the year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Ross Stores has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ross Stores has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Ross Stores belongs to the Zacks Retail - Discount Stores industry. Another stock from the same industry, TJX (TJX - Free Report) , has gained 0.2% over the past month. More than a month has passed since the company reported results for the quarter ended January 2026.
TJX reported revenues of $17.74 billion in the last reported quarter, representing a year-over-year change of +8.5%. EPS of $1.43 for the same period compares with $1.23 a year ago.
TJX is expected to post earnings of $1.00 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
TJX has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.