Ross Stores (Ross Stores (ROST)) had a good Friday. Actually, it had a great Friday. Shares of the off-price retailer climbed to a new 52-week high after the company reported first-quarter results that blew past expectations. The stock was up 6.95% at $232.29 at the time of publication, and the rally had a clear catalyst: shoppers are flocking to Ross in droves.
The company reported first-quarter sales that soared 21% year-over-year, with comparable-store sales up 17%. That's not just a bounce back from a weak period – that's genuine momentum. And according to analysts, the story is all about traffic.
BTIG analyst Robert Drbul, who reiterated a Neutral rating on the stock, noted that traffic was the clear driver. Customer count grew by double digits across income levels and age cohorts, including younger consumers. That's a big deal for a retailer that traditionally appeals to value-conscious shoppers. Drbul said modern marketing efforts are bringing in incremental traffic, and merchants are benefiting from strong availability of closeout products and improved vendor access. Ladies' apparel and cosmetics led the business, and trends remained consistent throughout the quarter after a strong start in February and steady mid-teen comps thereafter.
Drbul raised his 2026 EPS estimate to $7.70 and expects high-single-digit sales growth this year, with comparable sales rising 6.5%. For fiscal 2027, he raised his EPS estimate to $8.40, anticipating margin expansion and SG&A leverage alongside mid-single-digit revenue growth. He sees operating margin expansion contributing modest annual EPS growth through stronger gross margins and expense discipline. Share repurchases should also provide a tailwind, though Drbul prefers a better entry point with shares near their highs.
Wall Street remains broadly bullish. The stock carries a Buy rating with an average price target of $248.50. On Friday alone, several firms updated their forecasts:
- Wells Fargo: Overweight, raising target to $245.00
- Truist Securities: Buy, raising target to $290.00
- UBS: Neutral, raising target to $232.00
Ross Stores is riding a wave of strong consumer demand, better product availability, and smart marketing. The question now is whether the stock can keep climbing from here. For now, the momentum is clearly on its side.
