| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 16.10 | -90 |
| Graham Formula | 240.00 | 53 |
Ross Stores, Inc. (RSO.DE) is a leading off-price retail apparel and home accessories chain in the United States, operating under the Ross Dress for Less and dd's DISCOUNTS brands. Headquartered in Dublin, California, the company offers in-season, name-brand, and designer apparel, accessories, footwear, and home fashions at 20% to 60% discounts compared to department and specialty store prices. With a strong presence across 36 states, the District of Columbia, and Guam, Ross Stores operates 1,533 locations, including 1,340 Ross stores and 193 dd's DISCOUNTS stores. The company's efficient supply chain is supported by six distribution processing facilities strategically located in California, Pennsylvania, and South Carolina. As a key player in the consumer defensive sector, Ross Stores caters to budget-conscious shoppers seeking value without compromising on quality, making it a resilient performer in the retail industry.
Ross Stores presents an attractive investment opportunity due to its strong off-price retail model, which appeals to cost-conscious consumers, particularly during economic downturns. The company's ability to offer significant discounts on branded merchandise while maintaining profitability is a key strength. With a diluted EPS of €4.87 and a solid operating cash flow of €1.74 billion, Ross Stores demonstrates financial resilience. However, investors should consider the competitive nature of the off-price retail sector and potential margin pressures from supply chain disruptions. The company's moderate beta of 0.74 suggests lower volatility compared to the broader market, making it a relatively stable pick in the consumer defensive space.
Ross Stores competes in the highly fragmented off-price retail sector, where its primary competitive advantage lies in its ability to source branded merchandise at deep discounts and pass those savings to consumers. The company's scale, with over 1,500 stores, allows for efficient inventory management and strong vendor relationships. Unlike traditional retailers, Ross Stores' off-price model reduces reliance on seasonal sales, providing consistent value to shoppers. The company's dual-brand strategy—Ross Dress for Less and dd's DISCOUNTS—enables it to target different demographic segments, enhancing market penetration. However, Ross Stores faces intense competition from other off-price retailers, department stores, and e-commerce platforms. Its lack of a significant online presence could be a disadvantage as consumer shopping habits shift toward digital channels. Nevertheless, Ross Stores' focus on brick-and-mortar efficiency and value proposition positions it well against competitors in the budget retail space.