Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores has demonstrated a robust start to fiscal year 2026, with projected same-store sales growth of 7%-8% for Q1, suggesting sustained consumer demand. The company also posted impressive results for the previous quarter, with total sales rising 12.2% year-over-year to $6.64 billion, surpassing both consensus estimates and internal guidance. Additionally, management has indicated ambitious sales growth expectations of 10%-12% in Q1, buoyed by increased same-store sales and the opening of 17 new locations.

The declining operating margins for Ross Stores reflect ongoing cost pressures, as the 3Q25 operating margin decreased by 30 basis points year-over-year to 11.6%, despite being above initial guidance and market expectations. The projected Q1 operating margin indicates further contraction, anticipated to fall between 11.8% and 12.1%, attributed to rising distribution center costs, unfavorable expenses, and increased incentive costs. Additionally, gross margins are expected to contract by 10 basis points to 26.4%, while selling, general, and administrative expenses are forecasted to undergo deleverage, presenting additional challenges for the retailer moving forward.