A woman from the Bay Area purchased 500 shares of Ross Stores in 1988 for $3,813.50 and has never sold them; after five 2-for-1 stock splits, her holdings automatically increased to 16,000 shares. Based on the current stock price of about $250, this investment is now worth over $4 million, representing an approximate 1,049-fold increase and a total gain of about 104,790%.

The key to this investment was not complex trading, but her personal observation of Ross Stores' business model when it first entered the local market: low-priced brand apparel, constantly changing inventory, and a "treasure hunt" shopping experience. Ross was restructured into a discount retail model from six Bay Area stores in 1982 and was still in the early stages of national expansion in 1988; the company later expanded from a regional discount retailer to a national retail network with thousands of Ross Dress for Less and dd’s DISCOUNTS stores.

Ross has undergone five 2-for-1 stock splits, occurring in 1997, 1999, 2003, 2011, and 2015, resulting in a cumulative split factor of 32 times. Therefore, the initial 500 shares turning into 16,000 shares does not represent additional capital investment, but rather the result of the number of shares doubling after each split, with the stock price adjusted accordingly. Excluding cash dividends distributed during the period, this capital appreciation from $3,813.50 to $4 million corresponds to an approximate 20.1% compound annual return over 38 years.

The long-term rise of Ross is not due to a single explosive event, but is driven by its discount retail model, store expansion, same-store sales, inventory procurement capabilities, and capital returns. The company sells branded products at prices lower than department stores and traditional specialty stores, and creates a "treasure hunt" shopping experience through a continuously changing product mix; in fiscal year 2024, the company continues to add 89 new stores, indicating that physical retail has not been completely replaced by e-commerce, and low prices, immediate satisfaction, and inventory opportunity procurement still constitute an expandable retail flywheel.

In market mechanisms, Ross's buyers are middle- to low-income and value-seeking consumers looking for discounts on branded goods; the company procures excess inventory, clearance goods, and opportunistic sources from brand owners, department stores, and suppliers, and then resells them through a low-cost store network. During economic pressure, consumers shift from full-price retail to discount retail, leading to increased demand for Ross; when brand owners face inventory backlogs, Ross benefits from lower procurement costs. The beneficiaries are discount retailers with purchasing scale, turnover efficiency, and store density, while traditional department and full-price apparel retailers, which have higher inventory rigidity and find it harder to lower prices, are under pressure.

Source: Public Information