10 Best Retail Stocks To Invest In

5. Ross Stores, Inc. (NASDAQ:ROST)

Number of Hedge Fund Holders: 55

Ross Stores (NASDAQ:ROST) is an off-price apparel retailer that operates home fashion stores under two brands: Ross Dress for Less (Ross) and DD’s Discount. It operates over 1,764 Ross store locations in 43 US states, the District of Columbia, and Guam. It also has over 345 DD’s Discounts stores across 22 US states. Customers can find discounted in-season designer and name-brand apparel at the company’s stores, along with footwear, accessories, and home fashion. The company’s discounts typically vary from 20% to 60% compared to regular department and specialty store prices.

Ross Stores Inc. (NASDAQ:ROST) completed its expansion program for 2024 in fiscal Q3 2024, adding 43 new Ross and four DD’s Discount stores. It added a total of 89 locations for the year, comprising 75 Ross and 14 DD’s Discount stores. The company plans to relocate or close seven locations in fiscal Q4 2024 and expects to end 2024 with 1,831 Ross stores and 354 DD’s Discount stores.

Ross Stores Inc.’s (NASDAQ:ROST) total sales for fiscal Q3 2024 grew to $5.1 billion, up from $4.9 billion in the prior year. However, several factors slowed its fiscal Q3 2024 sales, including severe weather from Hurricane Hilton and Lane and unseasonably warm temperatures late in the quarter. However, investors are bullish on the stock and expect these headwinds to be temporary. The fact that customers are leaning towards discounts and deals, especially in the discretionary items category, also falls in the company’s favor.

In its fourth-quarter 2023 investor letter, TimesSquare Capital Management mentioned Ross Stores, Inc. (NASDAQ:ROST):

“In Consumer-oriented sectors, we lean towards value-oriented or specialty retailers, franchise models, as well as premium brands. Also gaining 23% over the quarter was Ross Stores, Inc. (NASDAQ:ROST), an off-price retailer featuring apparel and home fashions. Third-quarter results were solid as sales comparisons accelerated with higher levels of customer traffic across geographies. Management raised full-year guidance. We added to the position given our increased conviction at the start of the quarter.”