Why Ross Stores Stock Jumped Today
Key Points
Cash-strapped consumers are flocking to Ross Stores in search of bargains.
Management sees further profit gains in 2026.
- 10 stocks we like better than Ross Stores ›
Shares of Ross Stores (NASDAQ: ROST) popped on Wednesday after the off-price retailer reported strong holiday season results.
Image source: Getty Images.
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Value is in vogue
Ross Stores' sales rose 12% year over year to $6.6 billion in its fiscal 2025 fourth quarter, which ended on Jan. 31. Store openings and higher sales at existing locations drove the gains.
The discount retailer ended January with 2,267 stores, up from 2,186 in the year-ago period. Revenue at locations open for at least 14 months -- a metric known as comparable store sales -- grew an impressive 9%.
"Throughout the holiday season, we delivered compelling merchandise assortments to our stores, benefited from higher customer engagement through our new marketing campaigns, and executed in-store initiatives that enhanced the customer experience," CEO Jim Conroy said.
All told, Ross Stores' adjusted earnings surged 21% to $2.00 per share. That bested Wall Street's estimates, which had called for per-share profits of $1.91.
Dividend raise
By offering savings of up to 60% on name-brand apparel compared to department stores, Ross Stores' value-focused strategy is clearly resonating with shoppers.
Management projects same-store sales growth of 3% to 4% in fiscal 2026. The company also expects its earnings per share to increase to $7.02 to $7.36, up from $6.61 in fiscal 2025.
This anticipated profit growth prompted Ross Stores to boost its quarterly cash dividend by 10% to $0.445 per share. Its board of directors also authorized a new $2.55 billion stock buyback program.
"With a healthy balance sheet, disciplined execution, and a clear focus on delivering compelling value to our customers, we believe we are well-positioned to capture additional market share and drive sustainable, profitable growth in the year ahead and beyond," Conroy said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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