Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores has demonstrated a solid performance, with comparable sales growth of approximately 3.0%, surpassing expectations and indicating an effective strategy to increase customer traffic and average transaction size. The company's continuous improvement in SG&A leverage over four consecutive quarters, bolstered by the sale of a packaway facility, suggests a focused management approach to cost efficiency. Additionally, with projected total sales growth of 1%-5% for FY25 and an increase in capital expenditures indicative of future expansion efforts, the overall outlook for Ross Stores remains positive amid a competitive retail landscape.

Ross Stores has provided FY25E EPS guidance of $5.95-6.55, which is below the Street's expectation of $6.67, marking the widest negative delta since FY20. The company's fourth-quarter sales declined by 1.8% year-over-year to $5.912 billion, missing market expectations and indicating potential challenges in maintaining sales momentum moving forward. Additionally, weakening topline trends have been observed in early Q1, attributed to external factors such as poor weather and macroeconomic volatility, further contributing to the negative outlook for the company's financial performance.