What Happened?
Shares of off-price retail company Ross Stores (NASDAQ:ROST) jumped 4.2% in the afternoon session after the company announced it completed its fiscal 2025 store expansion with 40 new locations, and Citigroup raised its price target on the stock.
The new openings consisted of 36 Ross Dress for Less and four dd's DISCOUNTS stores. This move completed the company's plan to add 90 new locations during the year, bringing its total store count to 2,273. The expansion was viewed favorably by investors, partly because the company had a history of strong performance, with same-store sales growth averaging 3.1% over the previous two years. Adding to the positive news, an analyst at Citigroup increased the price target for Ross Stores to $171 from $146 and kept a Buy rating on the shares.
After the initial pop the shares cooled down to $153.87, up 4.2% from previous close.
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What Is The Market Telling Us
Ross Stores’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 12.8% on the news that the company reported an underwhelming first quarter of 2025 results: its revenue and EPS guidance for the next quarter fell short of Wall Street's estimates. Management also withdrew full-year guidance, reflecting the uncertainty around evolving trade policy and inflation, especially given that over half of its merchandise originates from China. On the other hand, Ross Stores beat analysts' revenue, EPS, and EBITDA expectations during the quarter. Still, this was a softer quarter.
Ross Stores is flat since the beginning of the year, and at $153.87 per share, it is trading close to its 52-week high of $156.61 from December 2024. Investors who bought $1,000 worth of Ross Stores’s shares 5 years ago would now be looking at an investment worth $1,576.
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