What happened

Ross Stores (ROST 0.06%) stock trailed the market last month with a 12% decline compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The dip put the off-price retailer's shares at only modest gains so far in 2018 after having been up by as much as 30% at one point in the year.

Two women shop for clothes.

Image source: Getty Images.

So what

Investors pushed the stock lower following Ross' third-quarter announcement. That report revealed modest sales growth of just 3%, which met management's guidance. However, the company lost ground to peers like TJX Companies, who boosted sales by 7% during the period.

Now what

The sticking point for shareholders was the discouraging outlook that Ross issued for the key holiday shopping season. Citing expectations for a "fiercely competitive retail environment," CEO Barbara Rentler and her team projected that growth would slow to between 1% and 2% in the fourth quarter. Profitability will likely be pressured by competition and by rising expenses in categories like labor and transportation, too. 

This outlook doesn't threaten Ross' longer-term expansion plans, which envision doubling its store base from its current mark of 1,400. But it does suggest that the company's 2018 growth rate won't be quite as robust as investors had hoped it would be after the company booked 5% sales gains in late August.