What happened

Off-price retailer Ross Stores (ROST -2.82%) stock jumped 20% higher last month, according to data provided by S&P Global Market Intelligence compared to a 2.8% increase for the broader stock market.

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The rally put Ross Stores stock back above the market's 18% gain so far in 2017 after it had logged losses as great as 17% earlier in the year.

So what

November's gain followed an earnings report by the retailer that showed healthy operating trends heading into the holiday season. Comparable-store sales growth was 4% in the third quarter, while management had predicted a more modest expansion of between 1% and 2%. Ross Stores' earnings also beat expectations by rising to $0.72 per share due to surprisingly strong profit margins.

Two young women shop for clothes.

Image source: Getty Images.

Now what

CEO Barbara Rentler and her team reacted to the improving operating position by raising their forecast for the holiday season. They now expect Ross Stores to expand comps by between 2% and 3% rather than the 1% to 2% uptick they had predicted back in August. At the same time, struggles among full-price retailers, especially department-store chains, should generate opportunities for the company to secure quality inventory at a discount. That should help keep Ross Stores' positive growth streak alive, while supporting continued healthy returns for shareholders.