The Off-Price Retailers Are Diverging Hard — And One Chain Is Pulling Away

All three major off-price retail chains have now reported earnings, and the scoreboard isn’t close. Ross Stores posted 10% comparable sales growth, against 4% at TJX and just 2% at Burlington. Ross also raised its guidance for both the third quarter and the full year — the other two didn’t have that luxury.

The gap comes down to execution. Ross has spent the past year remodeling stores, upgrading merchandise, and building a social media presence that’s landing with younger shoppers hunting for value on TikTok, at a moment when inflation is still sticky enough that bargain-hunting keeps paying off. Its gross margins beat expectations even after stripping out any benefit from tariff refunds, and July was its strongest comp month of the quarter — against tougher year-over-year comparisons than its rivals faced.

The other two chains are playing defense instead. Burlington is funneling its tariff refund directly into lower prices, a move that has investors bracing for a broader promotional cycle that could squeeze margins industry-wide. Meanwhile, TJX and Target both showed softness in apparel, even as more specialized retailers like Abercrombie & Fitch held up better.

The next checkpoint is the round of Q3 reports due in November, when TJX and Burlington will have to explain where Ross’s extra customers came from — and whether they can win any of them back. For now, Wall Street’s average price target on Ross already sits above $275, nearly 20% above where the stock trades today.