Ross Stores (ROST) Stock Forecast & Price Target

Ross Stores is supported by strong traffic, with double-digit gains in Q3 on top of +10% last year, broad-based demand across categories and demographics, and a long runway to expand from 6% of U.S. clothing and accessories store sales in FY19 to 7% in FY26E. Productivity remains compelling, with FY26E sales per store of $10.92MM and sales per square foot of $521, while new-store productivity of 97% in FY26E suggests expansion is still accretive rather than dilutive. Margin upside and earnings momentum further strengthen the case, as gross margin is modeled at 28.8% in Q3:26E versus 28.6% consensus, and management benefits from strong inventory availability, efficient marketing, and potential tariff refund support.

Ross Stores is facing a tougher fundamental setup as comps lap tariff-related 2H:25 disruption and gift and home strength, while Q1:26 likely benefited by 100bps+ from tax refunds, making near-term sales growth harder to repeat. Gross margin is also under pressure from freight inflation, tariff refunds lapping, and the packaway build, and a flat-to-down EBIT margin from 14.2% would leave little room for earnings growth as SG&A rises 13% on wages and DC investment. Competitive intensity is high from TJX, Burlington, Walmart, and online value players such as SHEIN and TEMU, while off-price store growth of about 270 openings a year tightens vendor access and real estate, increasing execution risk.