This discount retailer thrived in 2025 despite a volatile backdrop. Why that momentum can continue in 2026 – CNBC
Ross Stores did something unusual in 2025: it kept opening more brick-and-mortar locations as others in the industry consolidated their real estate footprint. The company opened 90 new stores between its flagship Ross Dress for less and its dd’s Discount sister chain. Meanwhile, others such as Dollar General said earlier this year they would close around 100 physical locations. Walgreens also said it would close hundreds of stores in 2025. This bet on brick and mortar seems to have paid off, as far as investors are concerned. Ross Stores hit an all-time high earlier in December, and the stock is up more than 20% — outpacing the S & P 500’s 17.9% advance. The stock has also taken a leg higher since posting better-than-expected results for the third quarter and raised its guidance for the fourth quarter. ROST 3M mountain ROST 3-mo chart The stock has continued to rise despite trade fears and concerns around the economy and tariffs. The retailer’s resilience in a volatile tariff environment can be a boon for the stock in 2026, according to analysts covering the stock. “There’s been a ton of market share put up for grabs by weaker players, like department stores closing stores, freeing up a lot of dollars that need to go somewhere.” Citi’s Paul Lejuez told CNBC. “Off-price over time has proven to be very good at capturing that market share.” Lejuez has a buy rating on Ross. Customers are also prioritizing value-focused purchases, he added. “The consumer has gravitated towards value and the off-price concept generally, whether the environment has been good or bad. They probably gain a little bit more share when the environment is not as good, but it doesn’t mean that they don’t also gain share when the consumer feels a little bit better about their finances,” Lejuez said. The outlook for the U.S. consumer has been mixed through 2025, as President Donald Trump pushes a more protectionist trade policies. President Donald Trump raised tariffs on China, the world’s leading clothing manufacturer. Levies on imports from Canada and Mexico — two of the U.S.’s biggest trade partners have also increased. China has retaliated with duties of its own, as have Canada and Mexico. Other discount retailers have been able to weather the tariff storm. TJX, the parent company of Marshalls, has jumped nearly 30% in 2025. This signals more upside for Ross Stores heading into the new year, according to Wells Fargo analyst Ike Boruchow. Strategic shift Ross Stores has also benefited from new leadership. In February, James Conroy joined Ross Stores as its chief executive officer. Since then, the company has pushed marketing initiatives and made efforts to improve its in-store experience. “With new CEO Conroy having been in the role for nearly 12 months now, we have noticed strategic initiatives being pushed that are likely bearing fruit,” Boruchow wrote. “Coming off a strong start to the year, both foot traffic and CC spending declined into June but rebounded in July on the back of higher promos through the month,” he said. “As August came around, trends began to stabilize in the +1-1.5%, where they have remained through September.” Boruchow has a price target of $200, which signals upside of 10% from Thursday’s close. Foot traffic is also trending higher for Ross Stores. According to Citi analysts, numbers from Placer.ai, a location data platform, show foot traffic was up 5.5% in the second quarter compared to 3.9% in the first quarter. This data is important as Ross and dd’s Discounts do not have an e-commerce presence, focusing exclusively on foot traffic to drive revenue. “Their in-store shopping experience is a treasure hunt that consumers really like to go to. I don’t think that it’s necessary for them to be involved in the e-commerce channel,” Lejuez said. “I think it’s actually helped their margins a great deal.”
