Ross Stores, Inc. (ROST), Kohl’s Corporation (KSS): A Quality Retailer With Sustainable Growth

Over the long haul, all three companies have been very successful, but Ross Stores and The TJX Companies, Inc. (NYSE:TJX) have greatly outperformed Kohl’s Corporation (NYSE:KSS)’s, which is indicated in the chart below:

ROST data by YCharts

While Kohl’s Corporation (NYSE:KSS)’s offers value to shoppers, as a department store without any uniqueness, it faces more competition than Ross Stores and The TJX Companies, Inc. (NYSE:TJX). This doesn’t mean Kohl’s Corporation (NYSE:KSS)’s is likely to be a bad investment going forward. It simply isn’t likely to have as much potential as Ross Stores and TJX.

Conclusion

Ross Stores does have to contend with fierce competition, but this is the case for any company in any industry. What’s more important is how a company manages to stay on pace or outperform its competition. By focusing on a broad product selection at highly discounted prices, as well as strategic locations, Ross Stores has managed to slowly and steadily build its business and brand. Ross Stores also has a realistic growth plan, and it should be able to weather any economic storms relatively well.

Don’t get the wrong idea — if the stock market suffers a steep correction, then Ross Stores will see a pullback in its stock price. The good news is that this would present an opportunity to buy more shares at lower levels. Ross Stores isn’t going anywhere.  

The article A Quality Retailer With Sustainable Growth originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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