Ross Stores Shows Broad-Based Category Strength: Can Momentum Hold?

Ross Stores, Inc. ROST has been benefiting from widespread strength across its merchandise categories, signaling healthy consumer demand and strong execution across its merchandising strategy. The company’s off-price model continues to resonate with value-focused shoppers, especially as economic uncertainty encourages consumers to seek branded goods at discounted prices. Notably, ROST has delivered balanced growth across departments rather than relying on a single standout category, reinforcing the durability of its operating model. The key question now is whether this broad-based category momentum can be sustained in the coming quarters.

In the fourth quarter, Ross Stores reported strong performance across nearly every major merchandise category, contributing to 9% comparable store sales growth and a 12% increase in total sales to $6.6 billion. Management highlighted particularly strong gains in shoes and cosmetics, while the Ladies’ and Men's categories also posted solid results. Even the home category, which faced tariff-related pressure earlier in the year, showed meaningful improvement toward year-end. This widespread strength supported overall fiscal 2025 sales growth of 8% to a record $22.8 billion, underscoring the breadth of demand across the assortment.

A major factor supporting this momentum has been Ross Stores’ disciplined merchandising approach and strengthened vendor relationships. The company has focused on delivering more branded bargains across good, better and best price points, allowing it to appeal to a wide range of customers. Additionally, marketing improvements and operational enhancements in stores have helped create a better shopping experience, encouraging repeat visits and higher transaction volumes. The company also noted strong growth in categories such as outerwear and toys during the holiday period, reflecting its ability to respond quickly to seasonal demand and evolving customer preferences.

Looking ahead, sustaining broad-based category strength will depend on Ross Stores’ ability to maintain inventory flexibility and capitalize on favorable buying opportunities in the marketplace. Continued investments in supply chain infrastructure, store operations and merchandising capabilities are expected to support growth across categories. However, as the company faces tougher comparisons and potential macroeconomic volatility, maintaining consistent demand across all merchandise segments will be critical. If Ross Stores can preserve this balanced category performance, it could reinforce long-term growth prospects and strengthen its competitive position within the off-price retail landscape.

ROST’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #2 (Buy) company have gained 18.6% in the past three months, outperforming the industry’s rise of 9.1%.

ROST Stock's Past Three-Month Performance

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Is ROST a Value Play Stock?

ROST currently trades at a forward 12-month P/E ratio of 29.36X, which is lower than the industry average of 32.27X. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.

ROST P/E Ratio (Forward 12 Months)

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Other Stocks to Consider

We have highlighted three other top-ranked stocks in the retail space, namely, Deckers Outdoor Corporation DECK, Tapestry, Inc. TPR and FIGS Inc. FIGS.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.

Tapestry, which was formerly known as Coach, Inc., is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales implies growth of 26.5% and 11.2%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 12.8%.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand, and it currently has a Zacks Rank #2.

The Zacks Consensus Estimate for FIGS’ current financial-year sales indicates growth of 11.7% from the year-ago reported number. The company delivered a trailing four-quarter earnings surprise of 187.5%, on average.

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Deckers Outdoor Corporation (DECK): Free Stock Analysis Report

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

Tapestry, Inc. (TPR): Free Stock Analysis Report

FIGS, Inc. (FIGS): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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