Ross Stores Stock Shows Momentum Before Q4 Results: Is a Beat Likely?

Ross Stores, Inc. ROST is likely to post year-over-year top and bottom line growth when it reports fourth-quarter fiscal 2025 earnings on March 3, after market close. The Zacks Consensus Estimate for quarterly revenues is pegged at $6.37 billion, indicating a rise of 7.8% from the year-ago quarter’s figure.

The consensus estimate for earnings is pegged at $1.87 per share, up 4.5% from $1.79 earned in the year-earlier period. The consensus mark has remained unchanged in the past 30 days.

Ross Stores, Inc. Price, Consensus and EPS Surprise

Ross Stores, Inc. price-consensus-eps-surprise-chart | Ross Stores, Inc. Quote

ROST has a trailing four-quarter earnings surprise of 6.7%, on average. In the last reported quarter, the company posted an earnings surprise of 12.9%.

Factors Likely to Influence ROST’s Q4 Results

Ross Stores’ fourth-quarter fiscal 2025 performance is expected to have been supported by broad-based strength across its merchandise categories, fueled by solid customer response at both banners. Its ability to consistently deliver value-driven bargains continues to resonate with price-conscious consumers amid a cautious discretionary spending backdrop. Consistent execution of store expansion plans is also expected to have supported top-line growth.

ROST is also likely to have benefited from its off-price retail model, which attracts value-focused shoppers seeking quality brands at reduced prices. Further, the company’s micro-merchandising strategy enhances product allocation by tailoring inventory to regional preferences, helping optimize assortments and support margins. Backed by its proven business model, Ross Stores is poised to have generated increased traffic, stronger same-store sales and improved profitability for the quarter under review.

On the last reported quarter’s earnings call, management cited macroeconomic uncertainties but emphasized that sales trends were broad-based across geographies and income cohorts, indicating steady engagement from its core low-to-moderate-income customer base despite external pressures.

As a result, ROST anticipated comparable sales (comps) growth of 3-4% for the fourth quarter of fiscal 2025. The company forecasts total sales to increase 6-7% year over year. Operating margin is expected to be 11.5-11.8%. Our model projects comps growth of 3.1% in the fiscal fourth quarter.

However, Ross Stores has been cautious regarding the ongoing macroeconomic and geopolitical uncertainties and persistent inflation, which have been impacting consumer spending on essentials like housing, food and gasoline. The company has been grappling with the tariff headwinds as evolving trade policies, prolonged inflation and elevated duties on China-sourced goods add pressure to its cost structure.

What the Zacks Model Unveils for ROST Stock

Our proven model conclusively predicts an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

Ross Stores currently has an Earnings ESP of +4.39% and a Zacks Rank of 2. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

ROST’s Stock Price Performance & Valuation Picture

From a valuation perspective, Ross Stores is trading at a discount relative to industry benchmarks. The company has a forward 12-month price-to-earnings of 28.09X, lower than the Retail-Discount Stores industry’s average of 33.47X.

ROST Stock's Price Performance

The recent market movements show that ROST’s shares have gained 13.4% in the past three months compared with the industry's 11.4% rise.

ROST Stock's Valuation

More Stocks With the Favorable Combination

Here are three more companies, which, according to our model, have the right combination of elements to post an earnings beat this season:

Dollar General Corporation DG currently has an Earnings ESP of +7.64% and a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 earnings per share is pegged at $1.58, implying a 6% year-over-year decline. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $10.75 billion, which indicates an increase of 4.4% from the figure reported in the prior-year quarter. DG has a trailing four-quarter earnings surprise of 22.9%, on average.

Chewy, Inc. CHWY has an Earnings ESP of +0.36% and currently carries a Zacks Rank of 3. CHWY’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.26 billion, which suggests a 0.3% rise from the figure reported in the year-ago quarter.

The consensus estimate for Chewy’s fourth-quarter earnings is pinned at 28 cents per share, flat year over year. CHWY has a trailing four-quarter earnings surprise of 10.7%, on average.

Costco Wholesale Corporation COST has an Earnings ESP of +0.87% and currently carries a Zacks Rank of 3. COST’s top line is expected to advance year over year when it reports second-quarter fiscal 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $69.22 billion, which suggests an 8.6% jump from the figure reported in the year-ago quarter.

The company is expected to register an increase in the bottom line. The consensus estimate for Costco’s second-quarter earnings stands at $4.53 per share, calling for 12.7% growth from the year-ago quarter. COST has a trailing four-quarter earnings surprise of 0.5%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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