Ross Stores, Inc.
Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brands in the United States. The company offers designer apparel, accessories, footwear, and home-fashioned products for the entire family. It sells its products to middle income households and households with lower to more moderate incomes. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.
What does it do?
Ross Stores runs a chain of discount clothing and home goods stores across the US under two brands: Ross Dress for Less and dd's DISCOUNTS. Think of it as a treasure hunt shopping experience — you walk in and find name-brand clothes, shoes, and bedding at 20-60% below what you'd pay at a regular department store. The deals come from buying leftover inventory that other retailers ordered too much of, then passing those savings on to shoppers. With over 1,700 Ross stores and 300+ dd's locations, it's one of the largest off-price retailers in the country.
Ross is seen as a recession-resistant retailer — when the economy gets tough and people tighten their budgets, discount stores like Ross often see more shoppers, not fewer. With inflation still on people's minds and consumers increasingly hunting for value, Ross sits right at the sweet spot of that trend. Investors care because it keeps growing even when traditional retail is struggling, which makes it a rare kind of defensive play in an otherwise risky sector.
How does it make money?
Ross makes essentially all of its money one way: selling discounted merchandise in its physical stores. It generated $22.8 billion in revenue in its latest fiscal year, up from $21.1 billion the year before — that's roughly 8% growth. It buys excess or closeout inventory from brands and wholesalers at steep discounts, marks it up enough to make a profit, but still prices it well below regular retail. Net income came in at $2.1 billion, meaning it kept about 9 cents of profit for every dollar of sales.
Why do investors care?
The core growth story is simple: Ross keeps opening new stores and more shoppers keep showing up. Management has long-term targets to eventually operate around 2,900 Ross and 700 dd's stores — meaning there's still a lot of room to expand from where it is today. The model also gets better as it scales, because bigger buying power means better deals from suppliers. For the thesis to work, consumer appetite for value shopping needs to stay strong and Ross needs to keep executing its real estate expansion without stumbling.
Deep Dive
MemberA full investor briefing on Ross Stores, Inc. — history, leadership, risks, and outlook.