Telsey Advisory Group upgraded Ross Stores to Outperform following a strong fiscal year-end performance that exceeded Wall Street expectations. The discount retailer reported fourth-quarter earnings per share of $2.00, beating consensus estimates of $1.90. Revenue grew 12.2 percent to $6.64 billion, with comparable sales rising 9 percent, more than double the high end of guidance.

Analyst Dana Telsey attributed the upside to broad-based strength across departments and geographies, driven by better product assortments and improved in-store experiences. Gross margin expanded to 27.2 percent, well above consensus, while operating margin of 12.3 percent exceeded both guidance and forecasts. The retailer's momentum has carried into fiscal year 2026, with first-quarter sales guidance raised to 10-12 percent growth.

Ross Stores plans increased store expansion while maintaining healthy margins and controlled costs. The company also announced enhanced shareholder returns through a higher dividend and a new $2.55 billion share repurchase program. Reflecting this improved outlook, Telsey raised its price target to $240 from $220, signaling confidence in Ross's ability to sustain its growth trajectory in the competitive discount retail sector.