Ross Stores, Inc. (ROST): Business Model Canvas [Dec-2025 Updated]

You're looking at the engine behind one of retail's most resilient players. Forget fancy e-commerce; Ross Stores, Inc.'s model is pure, disciplined scarcity, built on opportunistic buying that lets them deliver 20% to 60% off department store prices across their 2,273 locations. This relentless focus on cost management fuels their impressive scale, projecting sales between $21 to $22 billion and EPS between $6.08 and $6.21 for fiscal year 2025. It's a masterclass in off-price execution, and honestly, understanding how they manage that massive, fast-moving inventory is key to seeing why they keep winning. Dive below to see the full nine blocks of this powerful business model.

Ross Stores, Inc. (ROST) - Canvas Business Model: Key Partnerships

You're building a business model that thrives on opportunistic buying, and for Ross Stores, Inc. (ROST), the strength of its partnerships is the engine that makes that possible. These aren't just casual relationships; they are deeply integrated supply chain and real estate alliances that allow Ross Stores to consistently deliver savings of 20% to 60% off department store regular prices at Ross Dress for Less locations. Here's how those key relationships break down as of late 2025.

Diverse network of vendors for opportunistic buying

The core of the off-price model is access to merchandise that others can't get, or that they need to move quickly. Ross Stores, Inc. relies on a massive, flexible vendor base. While the outline suggests a network of over 10,000 vendors, what we know for sure is the depth of the buying organization supporting this. At the end of fiscal 2024, Ross Stores had over 800 merchants across Ross Dress for Less and dd's DISCOUNTS combined, all focused on securing these deals. This buying power is what drives the value proposition. The company's branded strategy, fully embedded for over a year, has further strengthened these vendor partnerships, leading to increased closeout opportunities. That's how they keep the racks fresh.

Global sourcing agents for securing closeout and overstock merchandise

To feed the 2,273 total locations operating across 44 states, D.C., Guam, and Puerto Rico, Ross Stores, Inc. utilizes international sourcing partners. Ross Procurement Inc., a subsidiary, manages significant global trade, with import records showing top sourcing countries like Vietnam and India. While the majority of merchandise is bought after it has been produced for other retailers, direct importing via international buying agents is a key component. These agents are instructed to uphold Ross Stores' ethical standards contractually, which includes policies against using child, slave, prison, or forced labor. This focus on ethical sourcing is a non-negotiable partnership requirement.

Real estate developers for aggressive new store expansion

Ross Stores, Inc. is definitely not slowing down its physical footprint growth. The company completed its aggressive expansion plans for fiscal 2025, adding a total of 90 new locations throughout the year. This included 36 Ross Dress for Less and 4 dd's DISCOUNTS stores opened in the third and fourth quarters across 17 states. The partnership with real estate developers is crucial for executing this growth, as they target diverse markets, including urban regions, suburban communities, and mid-tier population centers. Management remains confident in its long-term goal to grow to at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time. That's a lot of new leases.

Logistics and freight carriers for rapid, high-frequency inventory flow

Moving that volume of opportunistic merchandise requires a highly coordinated logistics network. Ross Stores, Inc. maintains specific freight routing guides for both Ross and dd's DISCOUNTS, indicating formalized relationships with carriers. The company supports its nationwide presence with multiple distribution centers, including the Southwest DC in Perris, CA, the Southeast DC in Fort Mill, SC, and the Eastern DC in Carlisle, PA. This infrastructure supports the high-frequency inventory flow needed to keep the off-price model working effectively. The goal is to accelerate the flow of fresh product to stores weekly.

Landlords for securing low-cost, off-mall retail locations

The off-price model is inherently tied to real estate cost discipline. Ross Stores, Inc. strategically partners with landlords to secure locations that are often off-mall or in less premium retail centers, which helps keep operating costs low relative to full-price competitors. The Ross Dress for Less banner offers savings of 20% to 60% off, while dd's DISCOUNTS offers savings of 20% to 70% off moderate department and discount store regular prices. Maintaining this value gap requires disciplined occupancy costs. The company's buying offices in New York and Los Angeles work closely with these real estate partners to secure sites that meet demographic targets while adhering to cost parameters.

Here's a quick look at some key operational metrics tied to these partnerships as of late 2025:

The success of Ross Stores, Inc. hinges on its ability to manage these diverse external relationships, from the global factories supplying the goods to the local landlords providing the physical space. The merchant teams, numbering over 800, are the direct link to the vendor base, ensuring the constant flow of the 'treasure hunt' merchandise that keeps customers coming back. Finance: draft 13-week cash view by Friday.

Ross Stores, Inc. (ROST) - Canvas Business Model: Key Activities

You're looking at the engine room of Ross Stores, Inc. (ROST) operations as of late 2025, focusing purely on the hard numbers that drive their off-price model. It's all about speed, volume, and relentless cost discipline.

Opportunistic, non-traditional merchandise purchasing (closeout buying)

The core activity relies on securing compelling brand name values through closeout buying. The company's branded strategy embedding led to improved vendor partnerships and increased closeout opportunities reported in Q3 2025. This sourcing strategy keeps the 'treasure hunt' fresh for the customer.

• Packaway accounted for approximately 41% of total inventories as of February 1, 2025.
• The company's buyers review departments weekly for markdowns to promote faster inventory turnover.

Rapid inventory turnover and micro-merchandising to stores

Moving product quickly is non-negotiable; slow inventory ties up capital and risks obsolescence. The data shows a high velocity, though inventory levels did grow as sales accelerated.

Here's the quick math on turnover:

Aggressive new store development and site selection

Ross Stores, Inc. continues to execute on its physical footprint expansion, targeting high-density urban and suburban areas. They completed a significant portion of their planned 2025 expansion in the third quarter alone.

• Total Ross stores expected by year-end 2025: 1,903 locations.
• Total dd's DISCOUNTS locations expected by year-end 2025: 360 locations.
• New stores opened in Q3 2025: 36 Ross and 4 dd's DISCOUNTS.
• Fiscal 2025 plan called for approximately 90 new stores total.
• As of February 1, 2025, the total store count was 2,186 (1,831 Ross, 355 dd's).

Efficient supply chain and distribution center management

Supporting the rapid flow of goods requires constant investment in logistics infrastructure. The company is actively building out capacity to handle future volume.

• Distribution costs increased by 60 basis points in Q3 2025, partly due to a new distribution center opening.
• The company invested in supply chain infrastructure, including a new distribution center in Buckeye, Arizona.
• Total selling square footage increased to 43.9 million as of February 1, 2025.

Cost control and expense management to maintain low prices

Maintaining the value proposition means keeping operating costs tight, even when facing external pressures like tariffs. The operating margin shows the result of this focus.

Key operational metrics from the third quarter ended November 1, 2025, illustrate this:

Tariff-related costs created headwinds, resulting in an approximate $0.05 per share negative impact on Q3 2025 earnings. Still, the operating margin of 11.6% was stronger than expected, showing cost control effectiveness. For the first nine months of 2025, sales reached $16.1 billion.

Finance: draft 13-week cash view by Friday.

Ross Stores, Inc. (ROST) - Canvas Business Model: Key Resources

You're looking at the core assets Ross Stores, Inc. (ROST) uses to drive its off-price model, and honestly, the scale here is what makes the whole thing work. These aren't just things they own; they are the engines for their value proposition.

Extensive Physical Store Footprint

The sheer number of doors is a massive resource, giving them broad market penetration for value-seeking customers. As of mid-October 2025, Ross Stores, Inc. operated a combined total of 2,273 locations across 44 states, the District of Columbia, Guam, and Puerto Rico. This followed the completion of their fiscal 2025 expansion, which added 90 net new locations throughout the year.

The breakdown of that footprint shows the dual-brand strategy:

• Ross Dress for Less locations: 1,909 as of late 2024, with additions in 2025.
• dd's DISCOUNTS locations: 364 as of late 2024, with additions in 2025.

They are still far from their long-term goal of at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations, suggesting this physical resource base has plenty of room to grow.

Proprietary Merchandising and Inventory Allocation Systems

The technology supporting the flow of goods is critical; it's how they manage the constant influx of opportunistic buys. Ross Stores, Inc. continually invests in its information systems to support this growth and execution. You see specific enhancements in systems like Merchandise Planning, Core Merchandising, and Allocation Management.

Specifically related to getting the right product to the right store, they use systems like Blue Yonder Allocation (formerly JDA Allocation) for Allocation and Replenishment. These systems help them manage assortment execution and plan achievement across their massive store base. They also focus on network and point-of-sale system improvements for speed and reliability.

Significant Packaway Inventory

The ability to store and strategically release inventory is a defining feature of their buying power. Packaway merchandise, which consists of close-outs, overruns, or canceled orders bought at deep discounts, allows them to manage inventory timing to maximize margin and value delivery. As of August 2, 2025, packaway inventory stood at 38% of total inventories. This is slightly down from the 41% reported at the end of February 2025.

The quick math here is that nearly 40% of their total stock is held off-site, waiting for the optimal moment to hit the sales floor, which is a huge competitive advantage when supply chains are tight. Typically, this inventory remains in storage for less than six months.

Large, Experienced Buying Organization

The talent behind the deals is a core intangible resource. Ross Stores, Inc. has historically focused on growing this function, having more than tripled the size of its buying staff from approximately 180 merchants at the end of 1999. Their buyers operate out of primary offices in New York City and Los Angeles, the nation's two largest apparel markets, plus a smaller office in Boston. This physical presence lets them source opportunities and negotiate directly with vendors daily. While I don't have the exact 2025 headcount for the buying organization, the historical investment suggests a very large and experienced team is in place to manage their combined network of approximately 7,900 merchandise vendors.

Strong Cash Flow and Balance Sheet

Financial strength underpins the ability to execute on opportunistic buying and return capital to shareholders. The company's balance sheet allows for aggressive capital deployment. For example, during the third quarter of fiscal 2025, Ross Stores repurchased 1.7 million shares for an aggregate price of $262 million. They remain on track to buy back a total of $1.05 billion in common stock for fiscal 2025.

On the dividend front, the Board declared a regular quarterly cash dividend of $0.405 per common share, which annualizes to $1.62 per share, representing a dividend yield of approximately 0.91% as of late 2025. The dividend payout ratio is reported at 25.31%.

Here's a snapshot of the scale these resources support as of the latest reported periods:

This financial muscle, combined with the physical and technological infrastructure, defines the Key Resources for Ross Stores, Inc. Finance: draft 13-week cash view by Friday.

Ross Stores, Inc. (ROST) - Canvas Business Model: Value Propositions

You're looking at the core reason Ross Stores, Inc. keeps winning market share, especially when consumers are watching every dollar. It boils down to the price gap they create between what you pay and what the item is worth elsewhere. That's the value proposition, plain and simple.

The primary draw for Ross Dress for Less is the deep, consistent markdown. We're talking about savings of 20% to 60% off department and specialty store regular prices, every single day. This isn't a sale; it's the everyday price structure.

For the dd's DISCOUNTS banner, the value proposition is calibrated slightly differently, targeting a more moderate price point. Here, the savings range from 20% to 70% off what you'd expect to pay at moderate department and discount stores.

Here's a quick look at how those savings stack up across the two banners, based on the February 1, 2025, reporting structure:

The 'treasure-hunt' experience is fueled by the constant flow of goods. New merchandise typically arrives from suppliers three to six times per week at both Ross Dress for Less and dd's DISCOUNTS stores. This rapid replenishment means the inventory is always fresh, forcing customers to visit often to find the best deals.

The merchandise itself is a key promise. You are getting first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions. This isn't just clearance; it's current, desirable product bought at opportunistic prices.

The physical footprint reinforces the convenience factor. As of late 2025, Ross Stores, Inc. operates a total of 2,273 locations across 44 states, D.C., Guam, and Puerto Rico. The strategy emphasizes neighborhood, off-mall locations, which is supported by the long-term goal to grow to at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS stores over time. That's a total target of 3,600 outlets, keeping the value proposition within easy reach of the core customer base.

You can see the value proposition in action when you look at the recent financial performance. For the latest reported quarter, revenue hit $5.60 billion, a 10.4% increase year-over-year, with comparable store sales up 2% in the second quarter of fiscal 2025. The company is forecasting comparable store sales growth of 2% to 3% for both the third and fourth quarters of fiscal 2025, showing that this value-driven model continues to attract traffic despite macroeconomic headwinds.

The core offerings can be summarized by what the customer gets:

• Savings of 20% to 60% off department store prices at Ross.
• Savings of 20% to 70% off moderate prices at dd's DISCOUNTS.
• Merchandise is first-quality and in-season.
• Inventory turns over three to six times per week.
• Long-term footprint goal of 3,600 total locations.

Finance: review the Q3 2025 comparable sales forecast against the Q2 actuals by end of day Tuesday.

Ross Stores, Inc. (ROST) - Canvas Business Model: Customer Relationships

The relationship Ross Stores, Inc. cultivates with its shoppers is fundamentally transactional, built on the immediate gratification of finding significant savings. This is driven purely by price and value, where the core proposition is offering first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day at Ross.

In the physical store environment, the model is decidedly low-touch and self-service. You walk in, you browse, and you buy; there is minimal personalized assistance, which helps keep operating costs low. This operational efficiency is critical to maintaining the deep discounts customers expect. As of February 1, 2025, Ross Stores, Inc. operated 1,831 locations across 43 states, the District of Columbia, and Guam, supporting this widespread, high-volume, low-service approach.

The allure of the 'treasure hunt' experience drives high-frequency store visits, a key component of the model, which is supported by the rapid flow of new merchandise. While the specific arrival frequency is a stated goal of 3-6 times per week, the financial data on inventory movement confirms this constant replenishment. The Trailing Twelve Months Inventory Turnover was reported at 5.7x, and the Inventory Turnover for the fiscal year ending January 31, 2025, was 6.24x. This high turnover rate relative to traditional department stores necessitates frequent customer trips to catch the latest finds.

Value-focused marketing reinforces this entire structure. The messaging emphasizes the savings and the brand names available at a discount, rather than lifestyle or luxury association. The Form 10-K filed on April 1, 2025, confirms the marketing mix uses a variety of mediums to attract customers, particularly through a mix of traditional and streaming television, and digital channels including social media, alongside new store grand openings. The pricing strategy itself is part of the communication, with most price tags displaying the selling price alongside the comparable value for that item in department and specialty stores.

Here are some key financial and operational metrics that underpin this customer relationship strategy as of late 2025:

The operational cadence supporting the value proposition includes:

• Savings offered at Ross: 20% to 60% off regular prices.
• Savings offered at dd's DISCOUNTS: 20% to 70% off regular prices.
• Total consolidated inventories and average store inventories were up 5% year-over-year in Q2 2025.
• The company repurchased 1.9 million shares for $262 million in Q2 2025.
• FY 2025 guidance for full-year EPS is projected between $6.08 to $6.21.

Ross Stores, Inc. (ROST) - Canvas Business Model: Channels

You're looking at how Ross Stores, Inc. gets its value proposition-deep discounts on brand-name merchandise-into the hands of the customer. For Ross Stores, Inc., the channel strategy is overwhelmingly physical, built on a massive, dedicated store footprint and the logistics network that feeds it.

The core channels are the physical retail locations, which are the primary, almost exclusive, point of transaction for the customer base.

• Ross Dress for Less physical stores: 1,909 locations as of late 2025.
• dd's DISCOUNTS physical stores: 364 locations as of late 2025.

The total operational footprint reached 2,273 locations across 44 states, the District of Columbia, Guam, and Puerto Rico after completing the fiscal 2025 expansion plan of 90 net new stores.

Ross Stores, Inc. has defintely maintained a brick-and-mortar focus, with technology strategy centered on supporting the physical stores and enhancing the supply chain, rather than developing a significant e-commerce platform. The company's long-term goal for this channel is to grow to at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time.

The backbone supporting these thousands of physical channels is the centralized inventory processing and distribution network. Ross Stores, Inc. is actively investing in this infrastructure to keep the shelves stocked efficiently. The company projected capital expenditures of approximately $855 million in fiscal 2025, driven in part by investments in new distribution centers. This includes the construction of a new distribution center in Buckeye, Arizona, and plans for additional facilities. Furthermore, the company announced plans to build its ninth distribution center in North Carolina, representing a $450 million investment for warehousing and fulfillment operations.

Here's a quick look at the scale of the physical channel as of the end of the fiscal 2025 expansion period:

The company's fiscal 2024 revenue, which frames the scale of this channel strategy, was $21.1 billion.

You can see the geographic focus in the expansion efforts, which directly impacts channel density:

• Ross Dress for Less expanded into newer markets like Michigan, New Jersey, and New York.
• dd's DISCOUNTS enhanced its footprint in core markets like California and Texas.

Finance: draft 13-week cash view by Friday.

Ross Stores, Inc. (ROST) - Canvas Business Model: Customer Segments

You're analyzing the core customer base for Ross Stores, Inc. as of late 2025, which is fundamentally split across two distinct but related value-oriented banners. The company's success hinges on its ability to capture spending from households feeling financial pressure, which is a key driver in the off-price retail sector, estimated to be valued at USD 372.46 Bn in 2025.

Middle-income households seeking brand-name apparel and home goods (Ross)

The primary banner, Ross Dress for Less, targets customers in the middle-income bracket. These shoppers are looking for first-quality, in-season, name brand and designer merchandise for the entire family. The value proposition is clear: savings of 20% to 60% off department and specialty store regular prices every day. As of October 2025, Ross Stores, Inc. operated a total of 2,273 locations, with long-term plans to grow the Ross Dress for Less banner to at least 2,900 outlets over time.

Here's a quick look at how the two banners segment the value-conscious shopper:

Lower to more moderate income households seeking extreme value (dd's DISCOUNTS)

The dd's DISCOUNTS banner is positioned to capture consumers with lower to more moderate incomes. This segment seeks even deeper discounts on similar product assortments, with advertised savings reaching up to 70% off moderate department and discount store regular prices. The company completed its fiscal 2025 expansion with 90 net new stores, including 4 new dd's DISCOUNTS locations, bringing the total to 2,273 stores across the enterprise. The long-term goal for this banner is to grow to 700 stores.

Price-conscious shoppers, predominantly female (70-75% of consumers)

While the exact percentage for Ross Stores, Inc. is not explicitly stated as 70-75% in the latest filings, the data defintely shows women are the dominant force in value-seeking. In a late 2025 survey, 78% of women reported engaging in value-seeking behaviors, outpacing men at 58%. Furthermore, female consumers account for 59% of U.S. discretionary general merchandise spending in the first half of 2025. This indicates that the price-conscious shopper, heavily represented by women, is critical to the overall performance of the off-price sector Ross inhabits.

The core customer base for both banners is united by a specific shopping motivation, which Ross Stores, Inc. capitalizes on:

• Value-driven consumers who enjoy the 'treasure-hunt' experience.
• Shoppers drawn to the discovery of branded and designer items at substantially lower prices.
• Customers prioritizing affordability and savings on desirable products.
• Shoppers who appreciate the ability to purchase first-quality merchandise at significant markdowns.

The company's fiscal 2024 revenue reached $21,129 million, showing the massive scale of transactions driven by these value-seeking segments.

Ross Stores, Inc. (ROST) - Canvas Business Model: Cost Structure

Ross Stores, Inc. operates with a distinct cost-driven model, where relentless focus on minimizing operating expenses is central to delivering its value proposition. For the fiscal year 2025, the company's total annual operating expenses were reported at approximately $18.544B. Looking at the trailing twelve months ending July 31, 2025, operating expenses reached $18.918B.

The single largest component of cost is the Cost of Goods Sold (COGS), reflecting the core business of purchasing merchandise at deep discounts. While the company has successfully mitigated some pressure, for fiscal 2024, the Cost of Revenue stood at $15,261 million. As a percentage of sales for fiscal 2024, COGS was 72.2%, showing the massive scale of merchandise acquisition costs relative to total revenue.

Store occupancy costs are a significant fixed overhead, driven by the extensive physical footprint. As of October 13, 2025, Ross Stores, Inc. operated a combined total of 2,273 locations across 44 states, D.C., Guam, and Puerto Rico. This network comprises 1,909 Ross Dress for Less stores and 364 dd's DISCOUNTS stores.

Distribution and supply chain logistics costs are managed tightly to support the high-volume, low-margin model. For fiscal 2024, distribution costs as a percentage of COGS decreased by 45 basis points compared to the prior year, indicating successful, albeit incremental, efficiency gains in moving product.

Tariff-related costs present a persistent, unpredictable headwind, especially since more than half of the products sold originate from China. The company has actively worked to mitigate this exposure through sourcing shifts. For the nine months ended November 1, 2025, the cumulative negative impact from tariff-related costs was approximately $0.16 per share. This compares to an approximate $0.05 per share negative impact reported just for the third quarter of 2025.

Here's a look at some key cost-related metrics from the most recent data available:

The focus on cost control manifests in several operational levers:

• Maintaining a high percentage of closeout merchandise, which was 38% of inventory in Q2 2025.
• Achieving a 90 basis point negative impact from tariff costs in Q2 2025, which was lower than the initially projected 90-120 basis points range.
• Reducing domestic freight costs by 30 basis points as a percentage of COGS in fiscal 2024.
• Operating margin for Q2 2025 was 11.5%, down from 12.4% in Q2 2024, illustrating the margin compression from external costs like tariffs.

Ross Stores, Inc. (ROST) - Canvas Business Model: Revenue Streams

Ross Stores, Inc.'s revenue generation is fundamentally tied to the in-store purchase of off-price merchandise. The primary income source comes from the daily sales of first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions across its physical store footprint. This model relies on high volume and rapid inventory movement rather than deep, sustained inventory holding.

Looking ahead, the financial expectations for the full fiscal year 2025 point to substantial top-line performance. Total sales are projected to land in the $21 to $22 billion range, building upon the approximately $21.1 billion in revenue generated in fiscal 2024. On the profitability side, the company has guided its Earnings Per Share (EPS) for fiscal 2025 to be between $6.08 and $6.21. This guidance reflects the expected performance across the entire store base, which, as of late 2025, includes a total footprint of 2,273 locations after completing the planned 90 new store openings for the year.

Revenue is sourced from two distinct, yet complementary, brand concepts, each targeting a slightly different income demographic with varying discount levels. The core of the business is the Ross Dress for Less chain, which targets middle-income households with savings of 20% to 60% off regular department and specialty store prices. The second brand, dd's DISCOUNTS, focuses on lower to more moderate-income customers, offering savings up to 70% off moderate department and discount store regular prices.

Here's a quick look at the scale and value proposition of the two revenue-generating brands as of mid-to-late 2025:

The financial engine of Ross Stores, Inc. is its ability to turn inventory quickly, which is a direct driver of revenue realization. This is achieved through:

• Opportunistic buying of excess inventory from vendors.
• Maintaining a 'treasure-hunt' experience with new merchandise arriving 3 to 6 times per week.
• Pricing merchandise significantly below department and specialty store regular prices.
• A business model that thrives on the constant flow of new, deeply discounted goods, which compels frequent store visits.