Consensus Estimates
| Metric | Q4 FY2025 Estimate | Q4 FY2024 Actual | YoY Change |
|---|---|---|---|
| Revenue | ~$6.05B | $5,91B | +2.3% |
| EPS (Non-GAAP) | ~$2.00 | ~$1.79 | +6.4% |
| Comparable Store Sales | ~+3% to +5% | -1.8% (YoY miss) | Recovery |
Analyst consensus: Buy (17 analysts). Average price target: $191.81 vs. current price of $202.30.
Key Metrics to Watch
1. Comparable Store Sales
Same-store sales are the single most important number Ross will report. Q3’s 7% comp was strong — the market will be watching whether that decelerated meaningfully in Q4 (likely, given tough comparables and holiday-season execution risk) or held above the 3-5% range that would confirm a durable trend. A print below +2% would be a significant disappointment; anything above +5% would be a genuine upside surprise.
2. Gross Margin
Merchandise margin is where the tariff story gets real. Ross sources heavily from China and Southeast Asia, and while management has been managing inventory tactically, gross margin will signal how much merchandise cost pressure is already flowing through. A 25-30 basis point expansion vs. prior year would be healthy; contraction would raise flags about FY2026.
3. FY2026 Guidance
Holiday quarter earnings at Ross are always paired with the full-year guidance reset for the new fiscal year. This is the number the market will trade on. Analysts are looking for FY2026 revenue growth guidance in the 4-7% range and EPS that implies continued operating leverage. Cautious guidance on tariff exposure will weigh on the stock regardless of how clean Q4 itself prints.
4. Inventory Turnover
Off-price retail lives and dies by inventory discipline. If Ross is sitting on elevated inventory heading into spring, it signals either demand softness or buying missteps — both problematic. Clean inventory levels support margin expansion and comp momentum; excess inventory often requires markdowns that hurt both margin and the brand.
5. Operating Income and SG&A Leverage
Q3 FY2025 operating income came in at $648.5M — strong. Investors will want to see whether that operating leverage extends into Q4 or if elevated labor and occupancy costs are eating into what should be a seasonally high-margin quarter. SG&A as a percent of sales bears watching, particularly as the company continues its modest store expansion program.
Scenario Analysis
| Scenario | Revenue | EPS | Comparable Sales | Stock Reaction |
|---|---|---|---|---|
| Bull | >$6.2B | >$2.05 | +6% or better | +5% to +8% |
| Base | ~$6.0–6.1B | ~$2.00 | +3% to +5% | Flat to +3% |
| Bear | <$5.9B | <$1.90 | <+2% or negative | -5% to -9% |
Bull case: Same store sales growth accelerates back toward Q3 levels, gross margin expands as management executes opportunistic buying, and FY2026 guidance comes in above consensus on the strength of the trade-down tailwind and tariff-driven consumer value-seeking. The stock, which is already trading above the average PT, could still push to the $215–225 range on a blowout.
Base case: Comps moderate to the low-to-mid single digits off Q3’s exceptional pace, revenue lands in the $6.0–6.1B range, and management provides measured FY2026 guidance that accounts for tariff uncertainty. Stock holds near current levels or ticks modestly higher.
Bear case: The holiday quarter disappointed again — echoing Q4 FY2024’s -1.83% YoY revenue decline — and management signals that merchandise cost inflation from tariffs will pressure margins in the first half of FY2026. Comp trends decelerate sharply from Q3’s peak, and downside guidance triggers a meaningful sell-off from elevated expectations.
Catalyst Checklist
1. Q4 Comparable Store Sales — The headline number; must confirm Q3 wasn’t an anomaly
2. FY2026 Revenue and EPS Guidance — The primary valuation driver heading into the new fiscal year
3. Gross Margin Commentary — Key signal on tariff and merchandise cost absorption capacity
4. Management Commentary on Tariffs — How is Ross hedging, diversifying sourcing, and planning for a potentially higher tariff environment in 2026?
5. New Store Openings / Real Estate Strategy — Ross has been a steady unit grower; any acceleration or deceleration in the store count matters for long-term revenue modeling
Context: Recent Trends
Ross Stores had an uneven first half of FY2025 — with solid comps in Q1 and Q2. Then Q3 arrived with a 10.4% revenue surge that genuinely surprised the Street and reignited enthusiasm for off-price retail as an inflation-era trade. The narrative is compelling: as consumers across income segments feel the squeeze of persistent inflation, rising interest rates on credit card balances, and the lingering effects of tariff pass-throughs in consumer goods, discount and off-price retailers benefit from trade-down behavior at the high end and core customer resilience at the value-seeking end.
The Q4 holiday quarter is always the acid test. Ross’s Q4 FY2024 was a notable stumble — a reminder that holiday execution is never guaranteed. This time around, the company enters with better momentum, a more favorable macro backdrop for value retail, and a consumer that appears to be actively seeking bargains. But the quarter also carried the weight of post-election uncertainty, shifting consumer sentiment, and competitive pressure from TJX Companies (TJ Maxx, Marshalls), which has been executing well.
The broader question for 2026 is whether tariff escalation becomes a net positive or negative for Ross. On one hand, tariffs on Chinese imports create a glut of opportunistic merchandise in the off-price channel as brands and manufacturers look to move displaced inventory — historically a tailwind. On the other hand, if merchandise costs rise broadly due to supply chain disruption, Ross’s ability to maintain its everyday low-price proposition could be tested. How management frames that dynamic in today’s earnings call will likely define the narrative for the stock over the next several quarters.
Earnings call begins after market close. Follow AlphaStreet for live transcript coverage and post-earnings results analysis.
Source: StockAnalysis, AlphaStreet Earnings Calendar. Estimates as of March 3, 2026. Consensus figures are approximate and subject to revision.