Analyzing Off-Price Traffic and Brand Momentum

Goldman Sachs remains constructive on off-price retail (BURL, ROST, TJX), noting that high-income consumers are driving traffic growth through trade-down activity. While momentum is strongest at Ross Stores, rising freight and fuel costs remain a key concern for margins later in the year.

Key Takeaways

• 1.The off-price retail sector remains structurally well-positioned for growth, benefiting from trade-down activity by high-income consumers amid inflationary pressures.
• 2.Off-price store traffic trends have shifted; growth is now increasingly driven by high-income zip codes rather than low-income demographics.
• 3.Ross Stores (ROST) continues to demonstrate the strongest momentum and traffic outperformance relative to off-price peers.

Table of Contents

• Key focus areas for the sector into the quarter
• Updating Recent Traffic Trends
• Assessing Traffic Trends by Demographic
• Updating Our Trackers Ahead Of 1Q Results
• Analyzing marketing spend by channel
• Valuation and Key Risks
• Disclosure Appendix

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