Ross Stores (ROST) closed out FY 2026 with fourth quarter revenue of US$6.6b and basic EPS of US$2.02, while trailing 12 month revenue reached US$22.8b and EPS came in at US$6.66, alongside earnings growth of 2.6% over the past year. Over recent quarters the company has seen revenue move from US$5.1b in Q3 2025 to US$6.6b in Q4 2026, with basic EPS stepping from US$1.49 to US$2.02 and trailing 12 month revenue rising from US$21.1b to US$22.8b. For investors, these results point to steady top line and EPS progress, with a slight squeeze on net profit margins. This sets the stage for a closer look at how durable the current profitability profile may be.

See our full analysis for Ross Stores.

With the headline numbers on the table, the next step is to see how these results line up with the prevailing stories around Ross Stores, and where the earnings release either supports or pushes back against the widely held narratives.

Same store sales running at 5% on a trailing basis

• On a trailing 12 month view, same store sales growth is 5%, compared with 3% at the prior FY 2025 year end, while individual quarters in FY 2026 ranged from 2% in Q2 to 7% in Q3.
• Consensus narrative points to resilient demand for value retail and mentions broad based traffic and basket improvement, which lines up with this 5% same store sales growth, yet:
  • Growth has not been uniformly strong every quarter, with Q2 same store sales at 2% compared with 7% in Q3, so the story is not a straight line.
  • The push into new and underpenetrated markets is cited as a growth driver, but the same store figures show that existing stores still need to keep pulling their weight, not just new openings.

Stronger same store sales help explain why many bulls focus on Ross as a value focused retailer with room to grow, but the quarterly swings show why it is worth paying attention to how consistent that demand really is over time.

🐂 Ross Stores Bull Case

Margins drift from 9.9% to 9.4%

• Trailing 12 month net profit margin stands at 9.4%, compared with 9.9% a year earlier, alongside earnings growth of 2.6% over the past year and a five year earnings CAGR of 15.7%.
• Bears highlight pressures from tariffs, distribution costs and cautious pricing, and the data gives some support to that concern:
  • The margin step down from 9.9% to 9.4% sits next to only modest 2.6% earnings growth, which is well below the 15.7% five year CAGR that the cautious view sees as harder to repeat.
  • Consensus expectations reference profit margins rising to 10% over the next few years, so the current 9.4% level leaves limited room for further cost pressure before that goal becomes harder to reach.

For anyone following the cautious view on Ross, it is this mix of slower recent earnings growth and slightly lower margins that keeps the focus on cost inflation and the limits of pricing power.

🐻 Ross Stores Bear Case

P/E of 33.1x against a DCF fair value of US$164.02

• The shares trade on a trailing P/E of 33.1x versus 19.4x for the US Specialty Retail industry and 22.4x for peers, while a DCF fair value of US$164.02 sits below the current share price of US$219.95 and the analyst consensus target of US$229.81.
• Consensus narrative leans on continued revenue and earnings expansion to support this premium, yet the current numbers create a tension:
  • Earnings grew 2.6% over the last year compared with an expected earnings growth rate of about 7.6% per year, so the market is paying a higher multiple than industry and peers for a growth profile that recently has been more moderate than the long run 15.7% earnings CAGR.
  • The DCF fair value of US$164.02 is below both the current price and the US$229.81 analyst target, so investors are weighing different valuation signals while also factoring in that no substantial insider selling was reported in the last three months in the data provided.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Ross Stores on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With both caution and optimism in the mix, it helps to see the details for yourself and decide where you stand. To weigh the trade off between potential upside and the issues investors are worried about, take a close look at the 2 key rewards and 1 important warning sign.

See What Else Is Out There

Ross Stores combines a premium 33.1x P/E with slightly softer margins and more moderate recent earnings growth, which leaves some investors questioning valuation support.

If that mix of rich pricing and softer momentum makes you cautious, you may want to compare it with companies screened as potentially cheaper using the 63 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.