Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores has demonstrated solid performance with a comparable store sales growth of approximately 3.0%, surpassing analyst expectations and aligning with guidance, indicating robust consumer traffic and increased average basket size. The company has also achieved four consecutive quarters of selling, general and administrative (SG&A) leverage improvement, primarily through the sale of a packaway facility, which suggests enhanced operational efficiency. Moreover, with an anticipated capital expenditure rise to $855 million, up from $720 million, Ross Stores is investing in its growth strategy while maintaining controlled inventory levels, positioning itself favorably for future expansion.

Ross Stores has provided Fiscal Year 2025 earnings per share (EPS) guidance of $5.95 to $6.55, which falls short of the consensus estimate of $6.67, marking the largest deviation since FY20. The company anticipates sales to decline by 1% to 3% year over year, a notable downgrade from previous expectations of a 5.6% increase, with fourth-quarter sales also decreasing by 1.8% and missing market forecasts. Additionally, management has reported weakening trends in topline metrics, attributed to adverse weather and broader macroeconomic challenges, which further emphasizes the potential for diminished performance and underscores a negative outlook for the stock.