Ross Stores Marketing, Merchandising Push Underappreciated, UBS Says

12:58 PM EDT, 10/26/2026 (MT Newswires) -- Ross Stores' (ROST) new CEO is likely to close the store productivity gap with TJX (TJX) through better merchandising, tighter store operations and higher marketing spend, which should sustain comparable-sales growth beyond this year, UBS said in a note Monday. UBS said the market underappreciates the marketing opportunity. Ross spent about 0.4% of sales on marketing in calendar 2025 versus 1.1% at TJX, and the bank expects the rate to rise as CEO Jim Conroy applies strategies that worked at Boot Barn. UBS also said a weak consumer backdrop and continued share losses at department stores should favor off-price retailers, citing Evidence Lab data showing discount stores as the top channel for holiday shopping. UBS raised its fiscal 2026-2028 EPS estimates by 2% to 23% and models revenue growing at about an 8.5% CAGR over the next two years, roughly 260 basis points above the Street. Near-term risks include tough comparisons and elevated diesel prices. UBS upgraded the stock to buy from neutral and raised its price target to $315 from $239. Price: 234.83, Change: +5.53, Percent Change: +2.41