"Cost performance ratio" becomes the main consumer trend! Discount retail giant Ross Stores, Inc. (ROST.US) achieves record high sales in Q4, with annual performance exceeding expectations.

Ross Stores, Inc. (ROST.US) announced strong fourth quarter performance and predicted that its annual sales will exceed Wall Street expectations, indicating that despite macroeconomic uncertainties looming over the market, consumer demand for its discounted apparel and accessories will remain strong. At the same time, the discount retailer also announced a new stock repurchase plan of up to $2.55 billion for the fiscal years 2026 and 2027, boosting its stock price by about 6% after hours. The financial report showed that the company's same-store sales in the fourth quarter increased by 9%, far surpassing analysts' expectations of 4.03%; quarterly earnings per share reached $2, also higher than the market's expected $1.90; and sales hit a historical high of $6.64 billion, exceeding the market's expectation of $6.4 billion. Looking ahead, the company expects the annual same-store sales growth rate for the new fiscal year to be between 3% and 4%, with the midpoint higher than analysts' average expectation of 3.05%. In a statement on Tuesday, Ross Stores, Inc. said, "We are encouraged by the strong performance of our business and confident in the strategic focus set for this year." CEO Jim Conroy stated, "With a healthy balance sheet, disciplined execution, and a clear focus on delivering outstanding value to our customers, we believe the company is well positioned to capture more market share and drive sustainable profit growth in the next year and beyond." This strong report from Ross Stores, Inc. follows the release of earnings from Target Corporation (TGT.US). Target Corporation's full-year profit outlook announced earlier in the day also exceeded market expectations. As of Tuesday's close, Ross Stores, Inc. stock has risen 9.7% year-to-date. In an environment of ongoing inflation and trade policy uncertainty, cost-conscious consumers are increasingly turning to discount chain stores to purchase brand-name products at lower prices, providing stable foot traffic for retailers like Ross Stores, Inc. To attract demand in the competitive discount market, Ross Stores, Inc. continues to increase marketing spending. Company executives stated during the earnings call that they have partnered with suppliers to address the impact of tariffs on categories like home goods. This California-based retailer is facing competition from established rivals such as TJX Companies (TJX.US), Burlington Stores, Inc. (BURL.US), as well as fast fashion brands like SHEIN, and e-commerce platforms like Amazon.com, Inc. (AMZN.US) expanding their discount product offerings. Michael Gunther, Vice President of Research and Intelligence at market research firm ConsumerEdge, pointed out that spending at discount chain stores has been the strongest in the retail industry, with increased consumption across all income levels. Recent growth has been driven primarily by lower-income shoppers, but consumption by middle to high-income households has also seen steady growth. It is worth noting that competitor TJX last week announced annual sales and profit outlook below expectations. TJX stated that due to rising costs of living, consumers may reduce purchases of non-essential items, sparking concerns in the market.