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Ross Stores (ROST) is sharply higher and reaching new all-time highs after reporting strong Q4 results in its important holiday quarter last night. The off-price retailer comfortably beat EPS expectations, while revenue growth accelerated, increasing 12.2% to $6.64 bln, well above expectations. ROST also issued an upbeat initial FY27 outlook, guiding EPS to $7.02-$7.36, in line with expectations, revenue growth of 5-7% (roughly $23.89-24.34 bln), above expectations, and comp sales growth of +3-4% on top of +5% in FY26, reinforcing continued strength in off-price.

• Comp sales accelerated to 9% from 7% in Q3, more than doubling the high end of guidance for +3-4%, driven largely by higher transactions with a modest increase in basket despite a 1% weather headwind.
• Strength was broad-based across both geographies and merchandise categories, with every region and major category posting positive sales growth.
• Its customer base remained resilient, with growth across income levels and age groups as overall customer counts accelerated, reinforcing that ROST is capturing value-seeking demand in a tougher macro backdrop.
• Encouragingly, the strength has continued, supporting ROST's strong Q1 comp guide of 7-8%. It also expects Q1 EPS of $1.60-1.67 and revenue growth of 10-12% ($5.48-5.58 bln), which were in line with and above expectations, respectively.
• In addition, ROST is accelerating store growth in FY27, with plans to open 85 Ross stores and 25 dd's DISCOUNTS locations, up from 80 Ross stores and 10 dd's DISCOUNTS stores opened in FY26.
• Also, ROST announced a new two-year $2.55 bln stock repurchase program and a 10% quarterly dividend increase to $0.445/share.

Briefing.com Analyst Insight

This was a very strong holiday quarter from ROST. Comp sales accelerated and more than doubled the high end of guidance, with the strength especially encouraging because it was driven largely by transactions, reinforcing that value-seeking behavior remains intact and ROST is executing well in capturing that demand. New stores openings are also supporting the broader growth story, including recent expansion into new markets like New York and Puerto Rico. Guidance was another positive, particularly on comps. A Q1 comp guide of 7-8% is notably strong for ROST, while full-year comp growth of 3-4% on top of 5% in FY26 suggests favorable off-price trends remain intact. The new $2.55 bln two-year buyback and 10% dividend increase also add to the confidence. With that, shares are trading at new all-time highs following the report. The strong move is understandable, but it also raises the bar as investors will want to see ROST continue to execute and deliver on its outlook.