Ross Stores Remains Cautious As Its Price-Sensitive Customer Remain Exposed To Macro Challenges, Says Analyst - Ross Stores (NASDAQ:ROST)

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Ross Stores Inc ROST with a price target of $120.
The analyst noted that over the past three years, Ross Stores has faced various unprecedented challenges, including the COVID pandemic, supply chain disruptions, and inflationary pressures.
The analyst added that those factors had impacted both the business and household budgets of ROST's core consumers.
As shoppers look for even greater value when visiting stores, the company's 900 merchants are fine-tuning assortments with an increased focus on delivering the most competitive values available while evolving the product mix per shifting consumer preference.
The company sees an opportunity to regain share from general merchandise retailers, department stores, and other big box retailers as they pull back on inventory investment.
The analyst thinks lower ocean freight rates look to benefit the merchandise margin in the first quarter and throughout 2023.
Ross Stores may also benefit from domestic freight expense in the second half of the year with technology advancements in stores and distribution centers, opined the analyst.
With lingering inflation and an uncertain macro environment, the company is being prudent in planning the business conservatively.
The analyst's Market Perform rating reflects inflationary pressures persisting into FY23 and the company's core lower-income, price-sensitive customers remaining more exposed to macro challenges.
Price Action: ROST shares are trading higher by 1.74% at $107.98 on the last check Monday.
Photo Via Company

Market News and Data brought to you by Benzinga APIs