Ross Stores (NASDAQ:ROST) is doing something that sounds almost impossible in modern retail. It is growing strongly without a real e-commerce business. While most retailers are chasing digital sales, faster delivery, and app-based shopping, Ross is still built around physical stores, surprise deals, and the old-school joy of finding something unexpected.
That sounds outdated. Yet the numbers say otherwise.
In its latest quarter, Ross delivered 17% comparable-store sales growth, total sales rose 21%, and EPS increased 37%. Management said it was the highest same-store sales growth in the company’s 40-year history. Every major category posted teen-level growth or better, with strength across regions, age groups, income levels, and ethnicities.
The story is simple. Inflation-weary shoppers still want value. Ross gives them that value inside stores. The stock is already up sharply, so the valuation debate matters. But the business momentum is hard to ignore.
The Offline Model Is Driving Record Store Traffic
Ross is not winning because shoppers are spending more online. It is winning because more people are walking into stores. That is the heart of the story. Management said the huge 17% comparable-sales increase was mainly driven by transactions, not just bigger baskets or higher prices. That matters because it points to real customer activity.
In plain English, Ross is not simply riding inflation. It is bringing in more shoppers. The company saw healthy customer-count growth across income levels, ethnicities, and age groups. That includes younger customers, which is very important for a retailer that depends on repeat visits. A bargain store becomes more valuable when new customers keep discovering it.
This also makes Ross different from many traditional retailers. Many companies use online sales to replace weak store traffic. Ross is doing the opposite. It is using stores as the main attraction. The customer has to show up, browse, and hunt.
That treasure-hunt model creates urgency. Shoppers know the best items may not be there tomorrow. So the visit becomes more than a transaction. It becomes entertainment. That is why the lack of e-commerce may be a strength, not a weakness. Ross avoids direct comparison with Amazon and keeps the value experience inside its stores.
Younger Shoppers & Social Buzz Are Expanding The Audience
One of the most important points from the earnings call was Ross’ strength with younger shoppers. Management said the company is outperforming almost every retailer it tracks with the difficult-to-reach 18-to-24-year-old customer. That is a big deal. Young shoppers are not usually loyal to old retail formats.
This gives Ross a more interesting story. It is not just a place for families trying to stretch a budget. It is also becoming a place where younger shoppers can find brands, beauty products, home items, and apparel at lower prices. That connects well with how people shop today. They want deals, but they also want discovery.
Ross is also modernizing its marketing. Management said the company is refreshing its creative message, changing its media mix, doing more events, and building more visibility on social media. This is an important nuance. Ross is not ignoring the internet. It is using the internet to drive people back into stores.
That is a clever middle ground. Ross does not need to build a costly online business with shipping, returns, and price comparisons. Instead, it can use digital channels to create interest. Then the shopper visits the store. This keeps the treasure-hunt model alive while still making the brand feel more current.
Better Brands & Closeout Deals Are Strengthening The Treasure Hunt
The Ross model only works if the merchandise feels worth the trip. This is where the latest quarter gives us more proof. Management said every major merchandise category posted comp growth in the teens or higher. Ladies and cosmetics were especially strong, and juniors also performed well.
That is useful because it shows the gains were not limited to one category. The strength was broad-based. Shoppers were finding value across the store. Cosmetics also stood out because Ross has been adding new brands and benefiting from trends like Korean beauty. These are exactly the kinds of categories that can attract younger shoppers.
The company also appears to be getting better access to merchandise. Management said vendors are increasingly calling Ross first when they have attractive closeout opportunities. That is important. As Ross grows faster, it may become an even more valuable partner for brands that need to clear inventory.
This creates a flywheel. More shoppers drive stronger sales. Stronger sales make Ross more attractive to vendors. Better goods bring shoppers back again. That is the core of the treasure-hunt model. Ross does not need endless online listings. It needs fresh, surprising bargains that make each visit feel different.
The Growth Story Is Strong But The Stock Is No Longer Cheap
Ross’ latest quarter reset expectations. Comparable sales rose 17%, margins came in better than expected, and operating margin expanded to 13.4%. Management also raised full-year guidance, calling for fiscal 2026 EPS of $7.50 to $7.74, up 13% to 17% from last year. Analysts also raised estimates after the quarter, with consensus expecting EPS to rise 18.4% this year.
The stock has noticed. Shares are up about 80% over the past year, and Ross trades around 29.5x next year’s earnings. That is not a cheap multiple for an off-price retailer. It means the market is already giving Ross credit for better traffic, stronger margins, and more durable growth.
There are still risks. Some first-quarter strength may have been helped by higher tax refunds. Comps are also expected to slow from the unusually high 17% pace. Fuel, freight, and consumer pressure could weigh on results if the economy softens.
Still, supporters have a clear argument. Ross is gaining shoppers, improving stores, opening new locations, and attracting younger customers. It also plans about 110 new stores this year, including roughly 85 Ross stores and 25 dd’s DISCOUNTS stores. The offline growth runway is still active.
Final Thoughts
Ross is one of the more unusual retail stories right now. It is performing strongly despite having no e-commerce business. The company is proving that physical stores can still matter when the value is clear, the product is fresh, and the shopping trip feels like a hunt.
The business momentum is real. Comparable sales were exceptionally strong. Categories were broad-based. Younger shoppers are showing up. Vendors are offering better closeout opportunities. Store openings remain part of the growth plan.
The valuation is the balancing factor. Ross recently traded at about 29.78x LTM diluted EPS, 20.11x LTM EV/EBITDA, 2.90x LTM EV/revenue, and 33.46x LTM levered free cash flow. Its LTM dividend yield was only 0.8%. Those multiples suggest the stock is already pricing in a lot of good news.
So the story is not “cheap retailer equals cheap stock.” It is more nuanced. Ross is a strong retailer with a premium valuation. The company’s offline model is working, but investors now have to weigh that strength against a stock that has already had a major run.
Disclaimer: We do not hold any positions in the above stock(s). Read our full disclaimer here.
