Ross Stores Inc "UBS Evidence Lab inside: What K-Shaped Economy?" (Neutral) Sole

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Ross Stores Inc "UBS Evidence Lab inside: What K-Shaped Economy?" (Neutral) Sole

ghlights additional Q1E 2.02 2.02

Q2E 1.89 1.92

runway to convert increased traffic into more repeat engagement. This dynamic

Q3E 1.67 1.71

gets to the pivotal market question around ROST. The market wonders if mgmt

Q4E 2.11 2.12

can "comp the comp" in FY27. If management can improve repeat conversion, 01/27E 7.70 7.75

the recent traffic gains could become a stronger foundation for durable same- 01/28E 8.20 8.53

store sales growth, in our view. 01/29E 8.60 9.20

Ross continues to benefit from a strong price perception, providing a solid Jay Sole

platform to enhance value and quality messaging. Consumers still view Ross Analyst

as cheaper, with a -22% relative price perception (Fig. 21), reinforcing its core Off- jay.sole@ubs.com

Price positioning. While 69% of consumers associate Ross with good value for +1-212-713 3559

money versus 71% for TJ Maxx (Fig. 15), this suggests an opportunity to better Mauricio Serna, CFA

translate Ross’ price leadership into a stronger value narrative. This is also Analyst

supported by merchandise perceptions, where 54% cite good quality versus 59% mauricio.serna@ubs.com

for TJ Maxx and 57% for Burlington (Fig. 16). We believe improved assortment +1-212-713 9028

quality and communication around value could help drive greater repeat traffic. Natalie Koltermann

Importantly, we believe initiatives to do both are underway. Associate Analyst

natalie.koltermann@ubs.com

Valuation: Our $232 PT is based on ~27x our FY28 EPSe of $8.60: +1-212-713 4229

Our DCF analysis also supports a $232 valuation. See more Top Survey Insights inside.

Highlights (US$m) 01/24 01/25 01/26 01/27E 01/28E 01/29E 01/30E 01/31E

Revenues 20,377 21,129 22,751 25,243 26,757 28,090 29,428 30,778