Ross Stores stock trades near 52-week high as off-price retailer extends sales growth

Ross Stores stock is trading near its 52-week high after the off-price retailer reported continued sales growth and higher earnings in its latest quarterly update, according to company disclosures for Q1 2025 and prior periods. Ross Stores Inc. (ISIN US7782961038) has benefited from consumer demand for discounted apparel and home goods, with management pointing to both comparable-store sales growth and an expanding store footprint as key drivers for performance. For investors, the current level of the share price relative to its recent trading range and the momentum in earnings and cash flow are central elements of the investment case.

Revenue up more than ten percent

According to Ross Stores' investor materials for fiscal 2024 and Q1 2025, the company has reported solid revenue expansion versus the previous year. In fiscal 2024, Ross Stores generated net sales of around $21.0 billion, up from approximately $18.7 billion in fiscal 2023, which represents year-on-year growth of about 12% as the retailer opened new stores and saw healthy demand at existing locations. This scale positions Ross among the largest off-price apparel and home fashion chains in the United States, with its Ross Dress for Less and dd's Discounts banners targeting value-conscious consumers who have become more focused on price and value in recent years.

In the most recent reported quarter, Q1 2025, Ross Stores continued this trend of expansion. Net sales for the quarter were roughly $5.7 billion, compared with around $5.1 billion in the same quarter of the prior year, implying quarterly revenue growth of about 12% year-on-year. Management attributed this increase to a combination of mid-single-digit comparable-store sales growth and contributions from new stores opened over the previous twelve months. The company has been emphasizing the strength of its merchandising strategy, which focuses on opportunistic buying of brand-name and designer goods at discounts, allowing it to offer lower prices while maintaining reasonable gross margins.

Gross profit has also grown in absolute terms, reflecting both higher sales and careful management of purchasing and inventory. For fiscal 2024, gross profit reached roughly $6.1 billion, up from around $5.2 billion in fiscal 2023, indicating growth of approximately 17% year-on-year. This outpaced the increase in net sales, suggesting that Ross Stores was able to capture margin benefits through sourcing, supply-chain efficiencies, and possibly a favorable sales mix with more full-price sell-through on certain categories. The company's off-price model, where it purchases merchandise at discounted rates from manufacturers and other retailers, remains at the core of its ability to maintain this margin profile while still offering low prices to customers.

Operating margin and EPS improve

Profitability metrics have strengthened alongside revenue expansion. Based on Ross Stores' reported results for fiscal 2024, operating income reached approximately $3.0 billion compared with about $2.3 billion in fiscal 2023, a rise of around 30% that reflects both higher sales and improved cost efficiencies. As a result, the operating margin expanded from roughly 12.3% in fiscal 2023 to about 14.3% in fiscal 2024, an increase of about two percentage points. This margin progression has been a focus for analysts, as it shows Ross Stores widening the gap between its selling and administrative expenses and its gross profit, partly through more disciplined store-level expenses, rent negotiations, and distribution efficiencies.

On a per-share basis, earnings have grown faster than sales. For fiscal 2024, Ross Stores reported diluted earnings per share (EPS) of approximately $5.85, up from around $4.40 in fiscal 2023, which represents EPS growth of about 33%. This increase reflects the combined effect of higher operating income and share repurchases executed over the course of the year. The company has long used buybacks as a way to return capital to shareholders, and execution in recent periods has contributed to EPS growth beyond what would be expected purely from net income expansion. In Q1 2025, EPS came in around $1.50, compared with roughly $1.28 in Q1 2024, equating to a quarterly EPS increase of about 17% year-on-year, again demonstrating that profit per share is rising ahead of revenues.

Net income figures illustrate the scale of the improvement. In fiscal 2024, Ross Stores delivered net income of roughly $2.2 billion, compared with around $1.7 billion in fiscal 2023. That translates to an increase of close to $500 million year-on-year, highlighting the underlying earnings power of its business model after accounting for taxes and interest. On a quarterly basis, Q1 2025 net income was approximately $560 million versus about $470 million in Q1 2024, an increase of nearly 19% that reflects robust operating trends. These improvements in profitability, alongside modest capital expenditure requirements relative to sales, have bolstered the company’s free cash flow and its capacity to fund both store expansion and shareholder returns.

Dividend and buybacks support returns

Capital returns are a notable part of Ross Stores' shareholder proposition. For fiscal 2024, the company paid cash dividends totaling roughly $0.47 per share, up from about $0.40 per share in fiscal 2023, representing a dividend increase of around 17%. While the dividend yield remains modest compared with high-payout sectors, the company has a track record of raising its dividend over time, with periodic increases reflecting growth in earnings and confidence in its cash generation. The board of directors has signaled its intent to maintain a balance between dividend growth and share repurchases, rather than focusing exclusively on one form of shareholder return.

Share repurchases have been more significant in terms of capital deployed. In fiscal 2024, Ross Stores repurchased approximately $1.4 billion of its own shares, compared with around $1.2 billion in fiscal 2023, an increase of roughly $200 million or about 17% year-on-year. Over multiple years, this buyback activity has gradually reduced the weighted average share count, magnifying EPS growth and providing support for Ross Stores stock. In Q1 2025 alone, the company bought back roughly $350 million of shares, indicating that it continues to prioritize repurchases as a use of excess cash. For investors, the combination of a growing dividend and consistent buybacks suggests that Ross Stores is aiming to deliver returns both through income and capital appreciation.

From a cash-flow perspective, Ross Stores generated substantial operating cash flow in fiscal 2024. Operating cash flow for the year was roughly $3.0 billion, up from around $2.5 billion in fiscal 2023, a rise of about 20% that mirrors the improvement in net income and margins. After capital expenditures of around $700 million in fiscal 2024, free cash flow remained comfortably positive, supporting the company’s ability to fund new stores, invest in supply-chain infrastructure, and distribute cash to shareholders. The company’s relatively asset-light model, due to leased stores and managed inventory, helps keep capital intensity moderate, which can be an advantage in generating steady free cash flow even during periods of macroeconomic uncertainty.

Store base expands toward 2,500 locations

Operationally, Ross Stores has been steadily growing its physical footprint. As of the end of fiscal 2024, the company operated around 2,100 Ross Dress for Less stores and approximately 340 dd's Discounts locations, giving a combined store count of about 2,440. This represented an increase from roughly 2,362 stores at the end of fiscal 2023, implying net new stores of around 78 year-on-year. Management has articulated a long-term target of at least 2,900 Ross Dress for Less and 700 dd's Discounts stores in the United States, suggesting further room for expansion. New store openings are typically concentrated in markets where the company sees attractive demographics and retail real estate opportunities, such as suburban centers with strong traffic and a mix of middle-income households.

In Q1 2025, Ross Stores opened approximately 19 new shops across its two banners, including both Ross Dress for Less and dd's Discounts locations, and closed a smaller number of underperforming stores, resulting in a net increase in the store base. The company continues to test new formats, merchandising strategies, and store layouts to optimize the customer experience and operational efficiency. Store productivity metrics, such as sales per square foot, have remained resilient even as the retailer adds new units, which helps support the overall margin structure and ensures that growth is not purely driven by square footage expansion without corresponding increases in revenue and profit.

Comparable-store sales remain an important indicator of underlying demand. For fiscal 2024, Ross Stores reported comparable-store sales growth of around 4% versus the prior year, following a period of recovery from pandemic-related disruptions. In Q1 2025, comparable-store sales increased by roughly 3% compared with Q1 2024, indicating steady growth in same-store performance. This level of comp growth is considered favorable in the context of mature U.S. retail markets, especially given competitive pressure from both traditional department stores and e-commerce platforms. Ross Stores has emphasized that its treasure-hunt shopping experience, where customers regularly find new assortments of merchandise at discounted prices, helps support repeat visits and drive same-store sales.

Ross Dress for Less drives core business

The Ross Dress for Less banner remains the core of Ross Stores' operations and revenue. Ross Dress for Less focuses on offering branded apparel, footwear, accessories, and home décor items at discounts to traditional department and specialty stores. The banner accounts for the majority of Ross Stores' net sales, with estimates suggesting that Ross Dress for Less generated around $17.5 billion of the approximately $21.0 billion in net sales reported in fiscal 2024, with the remainder coming from dd's Discounts. The Ross Dress for Less brand is designed to appeal primarily to middle-income households seeking value on national and designer brands, and the company maintains a broad geographic distribution across numerous U.S. states.

Merchandising at Ross Dress for Less is centered on opportunistic buying. Merchants aim to source merchandise from a wide variety of suppliers, including manufacturers, other retailers, and distributors, at prices significantly below regular wholesale levels. This allows Ross Dress for Less to price products competitively while still sustaining gross margins. Average transaction values have gradually increased as the banner has broadened its product mix to include more home goods and seasonal assortments. Customer traffic has benefited from macro trends such as inflationary pressures and higher interest rates, which have made consumers more sensitive to pricing and driven them toward off-price retailers that offer lower prices compared with full-price chains.

Store productivity at Ross Dress for Less remains a focus area for management. Metrics such as average sales per store and average sales per square foot are monitored closely. Although specific figures can vary by reporting period, the banner has historically delivered sales per square foot that compare favorably with other off-price peers. Efforts to enhance productivity include adjusting assortments based on local demographics, optimizing inventory turnover, and refining store layouts to make it easier for customers to navigate and discover merchandise. Technology investments in inventory management and forecasting also contribute to maintaining a balance between having sufficient assortment and avoiding excessive stock that could pressure margins.

Ross Stores stock near 52-week high

Ross Stores stock has reflected this fundamental progress in its trading performance. As of 15 July 2025, Ross Stores shares closed at around $155.00 on the Nasdaq, close to the stock's 52-week high of approximately $158.00 and well above the 52-week low of about $110.00. This places the stock roughly 41% above its 52-week low, illustrating a substantial recovery and upward trend over the period. The move has occurred as the market has digested stronger earnings, higher margins, and continued capital returns, with the share price gradually adjusting to reflect these developments. Trading volumes have generally remained healthy, with daily volume consistent with a large-cap U.S. retail name.

On a year-to-date basis as of 15 July 2025, Ross Stores stock has appreciated by approximately 22%, outperforming broad U.S. equity benchmarks such as the S&P 500, which has gained a lower percentage over the same period. The stock’s performance relative to retail sector peers has also been notable, with Ross Stores comparing favorably to some traditional department store chains that have faced slower growth and margin pressure. The market has responded positively to Ross Stores' ability to maintain revenue growth and margin expansion in a competitive environment, as well as to its disciplined capital allocation policy.

Ross Stores' market capitalization reflects the scale of the company in the public markets. Based on the share price of around $155.00 as of 15 July 2025 and an estimated diluted share count of roughly 330 million, the company’s market capitalization stands at approximately $51 billion. This valuation positions Ross Stores firmly within large-cap territory and underscores investors' perception of its off-price business model as relatively resilient through various economic cycles. The combination of a large store base, strong cash generation, and steady capital returns contributes to this market capitalization and influences how portfolio managers benchmark the stock against other consumer discretionary holdings.

Balance sheet and guidance underline resilience

Financially, Ross Stores maintains a conservative balance sheet. As of the end of fiscal 2024, the company reported cash and cash equivalents of around $4.0 billion, alongside short-term investments, providing a sizable liquidity buffer. Long-term debt stood at roughly $2.0 billion, resulting in a net cash position when comparing cash and investments to debt. This balance sheet structure gives Ross Stores flexibility to navigate macroeconomic fluctuations, invest in store expansion and technology, and continue its capital-return programs without relying heavily on external financing.

Inventories, a key metric for retailers, were managed carefully. At the end of fiscal 2024, Ross Stores reported merchandise inventories of approximately $3.0 billion, a figure broadly in line with the requirements of its store base and seasonal needs. Inventory levels were slightly higher than in fiscal 2023, when inventories stood around $2.8 billion, reflecting the addition of new stores and the need to support higher sales volumes. However, inventory turnover remained within management’s targeted range, suggesting that merchandise is being sold through efficiently and that the company is not building excessive stocks that could lead to markdowns and margin pressure.

Guidance provided for fiscal 2025, as of the most recent update, indicates that Ross Stores expects continued growth, albeit at a more moderate pace than the sharp rebound seen in some prior periods. Management has guided for fiscal 2025 net sales growth in the mid-single-digit percentage range compared with fiscal 2024, with comparable-store sales expected to rise by around 2% to 3%. Operating margin is targeted to remain in the mid-teens, broadly consistent with the 14.3% reported in fiscal 2024, as the company balances investments in store labor and technology with ongoing cost efficiencies. EPS guidance suggests a range around the mid-to-high $5 levels, indicating stable to slightly rising earnings per share, assuming continued share repurchases.

Product assortment supports traffic

The product assortment across Ross Stores' banners is central to generating customer traffic and sustaining revenue. The company offers a wide range of categories, including women’s, men’s, and kids’ apparel; footwear; accessories; and home goods such as bedding, bath, kitchenware, and décor. These categories are procured on an opportunistic basis, taking advantage of fluctuations in supply, closeouts, and excess inventory from manufacturers and other retailers. The breadth of the assortment gives Ross Stores flexibility to adjust offerings based on changing consumer preferences and seasonal patterns.

Home goods have become an increasingly important category within Ross Stores' mix. Items such as small furniture pieces, decorative accessories, kitchen tools, and linens have attracted customers seeking affordable ways to refresh their homes. The company has indicated that home-related sales have grown faster than some apparel segments in certain periods, contributing to overall revenue growth and diversifying the sales base. This shift also aligns with broader consumer trends that saw heightened interest in home improvement and décor, especially in the years following the pandemic, when households spent more time at home.

Seasonal and event-driven merchandise is another component of Ross Stores' product strategy. The company regularly introduces assortments tied to holidays, back-to-school season, and specific events such as graduation or weddings, aiming to capture additional demand. Because the off-price model depends on opportunistic sourcing, the exact mix of seasonal merchandise can vary, but the company seeks to maintain a consistent presence in key seasonal categories to encourage repeat visits. The treasure-hunt aspect of shopping at Ross, where customers do not know precisely what they will find but expect new deals, is reinforced by these rotating seasonal assortments.

Closing view on Ross Stores stock

Ross Stores stock is currently trading at around $155.00 as of 15 July 2025 on the Nasdaq, near its 52-week high of approximately $158.00 and significantly above its 52-week low of about $110.00. This positioning reflects strong revenue growth, margin expansion, and consistent capital returns through dividends and share repurchases. While broader macroeconomic conditions and competition from both traditional retailers and e-commerce remain relevant factors to monitor, Ross Stores' off-price business model, solid balance sheet, and expanding store base provide a framework for ongoing performance in the U.S. retail landscape.