Risk/Reward Rating: Negative
Ross Stores is one of the largest off-price apparel and home fashion chains in the United States with 1,859 locations. Ross was especially hard hit by COVID which forced the shutdown of its stores for a portion of 2020. Given the reliance on physical stores as compared to online sales, the company’s earnings were devastated last year. In addition to the earnings hit, the company also took on over $2 billion of debt to cushion itself against the COVID impact. Ross has historically carried little debt on its balance sheet.
Even though things have returned to normal in 2021, Ross still expects its earnings to come in beneath the level achieved in 2019.
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