Ross Stores (ROST) Earnings Date & Reports

Key Takeaways

• Ross Stores delivered outstanding Q1 fiscal 2026 results, with earnings per share (EPS) of $2.02, crushing both consensus analyst estimates of approximately $1.73 and the company's own guidance range of $1.60 to $1.67.
• Total sales surged 21% year-over-year to $6.01 billion, well above the $5.64 billion Wall Street expected, while comparable store sales jumped a remarkable 17% — a company record — driven overwhelmingly by higher transaction volumes.
• Operating margin expanded 120 basis points to 13.4%, fueled by merchandise margin improvement of 85 basis points, occupancy leverage, and lower distribution and domestic freight costs.
• Management raised its full-year fiscal 2026 outlook, now projecting comparable store sales growth of 6% to 7% and EPS of $7.50 to $7.74, up 13% to 17% from the prior year.
• The company repurchased 1.5 million shares for $319 million under a newly authorized $2.55 billion buyback program and remains on track to open approximately 110 new stores in fiscal 2026.

Earnings Context and Why It Matters

Ross Stores' first quarter fiscal 2026 report, released on May 21, 2026, arrived at a pivotal moment for the off-price retail sector. Coming off a strong fiscal 2025 in which total sales reached a record $22.8 billion and comparable store sales grew 5%, investors were eager to see whether the company could sustain its momentum heading into the new fiscal year. The report carries added significance because it marks the first full quarter under CEO Jim Conroy's increasingly visible strategic initiatives — including revamped marketing campaigns, improved in-store experiences, and sharper merchandise execution. As a bellwether for the off-price retail space, Ross Stores' performance offers broader signals about consumer spending trends, particularly among value-conscious shoppers navigating a mixed macroeconomic environment.

Reported Results

Ross Stores reported total sales of $6.01 billion for the 13-week period ended May 2, 2026, representing a 21% increase from $4.98 billion in the same quarter a year ago. Comparable store sales (also known as same-store sales or comps) rose 17%, a dramatic acceleration from the flat comps recorded in the prior-year period and the strongest quarterly comp performance in company history. This growth was primarily driven by a significant increase in customer transactions, with double-digit gains in customer count across income levels, ethnicities, and age groups — a testament to the broad-based appeal of the company's value proposition.

On the bottom line, diluted EPS reached $2.02, up 37% from $1.47 in the first quarter of fiscal 2025. This result easily surpassed the company's own guidance of $1.60 to $1.67 and beat the Zacks Consensus Estimate of $1.70 by a wide margin. Net income climbed to $650 million compared to $479 million in the prior-year quarter.

Operating income rose 32.6% year-over-year to $804 million, with operating margin expanding 120 basis points to 13.4%, well above the company's plan of 11.8% to 12.1%. The margin improvement was powered by an 85-basis-point gain in merchandise margin, a 60-basis-point benefit from occupancy leverage on strong sales, and lower distribution and domestic freight costs (down 15 and 10 basis points, respectively). These gains were partially offset by a 25-basis-point increase in buying costs and SG&A (Selling, General, and Administrative) expenses, partly reflecting higher incentive compensation tied to the strong earnings performance.

Consolidated inventories ended the quarter up 12% year-over-year, with packaway inventory — merchandise purchased at deep discounts and held for future seasons — accounting for 36% of the total, down from 41% a year ago. Management expressed confidence in the level and composition of inventory entering the second quarter and noted that the availability of closeout merchandise in the marketplace remains robust.

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Market Reaction and Investor Sentiment

Investors responded positively to the first quarter results. Ross Stores shares gained more than 5% in after-hours trading on May 21, 2026, following the earnings release, and continued to trend higher in subsequent sessions. The stock, which traded near $228 immediately after the report, has since moved toward the $233 range as of mid-July 2026, edging closer to its 52-week high of $242.81. The bullish reaction reflected not only the magnitude of the earnings and revenue beats but also the strength of the raised full-year guidance, which signaled management's confidence that the quarter's momentum was not a one-off event. Analysts have maintained a broadly favorable posture, with several firms raising their price targets following the report. The company's ability to deliver record comparable store sales while expanding margins reinforced the investment thesis that Ross Stores is gaining market share in an environment where consumers are increasingly prioritizing value.

Forward Outlook and Key Factors to Monitor

Looking ahead, Ross Stores provided second quarter fiscal 2026 guidance that calls for comparable store sales growth of 6% to 7% and EPS in the range of $1.85 to $1.93, representing 19% to 24% growth compared to the $1.56 reported in the second quarter of fiscal 2025. The company expects an operating margin of 12.8% to 13.0%, reflecting continued merchandise margin improvement and easing distribution cost comparisons as it laps prior-year cost pressures.

For the full fiscal year, management raised its comparable store sales growth target to 6% to 7% (up from the prior outlook of 3% to 4% issued in March) and its EPS forecast to $7.50 to $7.74, implying 13% to 17% growth over the $6.61 reported in fiscal 2025. This upward revision reflects an unusually strong start to the year that exceeded even the company's own ambitious internal plans.

Investors should monitor several key factors in the quarters ahead. The availability and pricing of closeout merchandise remains a critical input for the off-price model, and management has indicated that supply remains healthy. Store expansion execution is another area to watch, with approximately 110 new locations planned across the Ross Dress for Less and dd's DISCOUNTS banners. The company's marketing initiatives and in-store experience improvements appear to be driving meaningful customer acquisition, but sustaining that engagement through a full fiscal year will be essential. On the cost side, distribution and freight expenses have been tailwinds, though fuel costs and supply chain disruptions represent ongoing variables. Lastly, consumer spending patterns — particularly among the low-to-moderate income demographic that forms Ross Stores' core customer base — will remain an important external factor, especially if macroeconomic conditions shift in the second half of the year.

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