During the holiday season, Wall Street will pay particular attention to retail stocks in what tends to be their make-or-break time of the year. 

Some individual names like Ralph Lauren Co. (NYSE: RL) have been having a decent year, some big names like Target Corporation (NYSE: TGT) have been struggling, while others like Abercrombie & Fitch Company (NYSE: ANF) have had their best run in years.  

But for those on the sidelines thinking about getting involved and trying to differentiate the various opportunities, one name stands out from all the rest as a top-quality buy: Ross Stores Inc. (NASDAQ: ROST). 

Strong fundamentals

Shares of the discount department store have rallied since the summer of last year, with the most recent leg kicking off at the end of September. They're currently up 85%, and last week, they traded within a few dollars of 2021's all-time high. Ross is one of those rare breeds of stock that has delivered consistent returns before, during and after the pandemic.  

Friday saw them pop 7%, with a gap up on the open to boot, as momentum builds for a run to actual fresh highs. The most recent catalyst was the company's Q3 earnings, released after the bell rang to end Thursday's session. 

They smashed analyst expectations for both headline numbers, with earnings coming in 10% higher than expected and revenue for the quarter showing nearly 8% year-on-year growth. This growth should continue into 2024, with management guiding for earnings to land nearly 25% higher than at the start of this year. 

Beyond the headline beat, which is always the first port of call for a retailer, there were solid results in the finer details. Ross' operating margin for the quarter jumped from 9.8% to 11.2%, helped in large part by lower costs. With the fundamentals looking so impressive, it was a small wonder that their shares jumped like they did on Friday. 

Impressive comparisons

Indeed, there's every reason to think we'll see this northbound trend continue through the final few weeks of the year as expectations grow for another bumper report in three months. Ross' price-to-earnings ratio is at a two-year high; there's no doubt that investors back Ross to continue outperforming its peers. 

Take the SPDR S&P Retail ETF (NYSEARCA: XRT), of which Ross is a component, for example. Whereas Ross shares have tacked on that 85% since May 2022, XRT has returned 4%, barely keeping its head above water. And when compared against other department stores, it's not even that close. Burlington Stores Inc. (NYSE: BURL), Macy's Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN) are all down between 7% and 27% over the same period. 

Getting involved 

Ross should be in a special category against other well-known discount specialty stocks like Dollar Tree Inc.(NYSE: DLTR), whose shares are down 30% since May 2022. In addition to this strong and consistent outperformance, the company also offers a dividend, the current yield at an attractive 1%. 

MarketBeat's MarketRank tool has Ross shares listed as a "moderate buy," while the Analyst Forecasts tool shows that out of 18 analyst ratings, 15 are rating the stock a buy. 

Ross isn't the only attractive retail stock out there; plenty of interesting opportunities are opening up depending on your appetite for risk. But pound for pound, it's arguably the strongest performing with the most consistency for returns, so we're calling it the top retail stock to own this holiday season.