Ross Stores (ROST) Earnings Date & Reports

Key Takeaways

• Ross Stores reported second-quarter fiscal 2026 diluted earnings per share (EPS) of $2.66, which included roughly $0.60 per share from one-time tariff refunds.
• Total sales rose 13% year over year to about $6.26 billion, while comparable store sales (comps) climbed 10%, driven primarily by customer traffic.
• Excluding the tariff refund benefit, EPS of approximately $2.06 still cleared the company's guidance of $1.85–$1.93 and analyst consensus near $1.93–$1.95.
• Management raised its second-half and full-year outlook, lifting fiscal 2026 EPS guidance to a range of $8.61–$8.77.
• The company opened 47 new stores in the quarter and increased its 2026 store-opening plan to 115 locations.

Earnings Context and Why It Matters

Ross Stores, the Dublin, California-based off-price retailer behind the Ross Dress for Less and dd's DISCOUNTS banners, has become a standout in a challenging consumer environment. Its value-oriented model tends to attract shoppers trading down when budgets are stretched, and the company entered this report on a strong run of traffic-driven comps growth. Investors watch Ross's quarterly results closely as a read on both consumer health and the broader off-price sector. Because the second quarter included a sizable, non-recurring tariff refund, this report also tested whether underlying demand and profitability could stand on their own — a key question for anyone evaluating the durability of the recent momentum.

Reported Results

For the 13-week quarter ended August 1, 2026, Ross Stores reported total sales of $6.26 billion, up 13% from $5.53 billion a year earlier and above consensus near $6.14–$6.16 billion. Comparable store sales increased 10%, marking the second consecutive quarter of double-digit comps growth, driven mainly by higher transaction volume across new, returning, and existing customers.

Diluted EPS came in at $2.66, versus $1.56 in the prior-year period. That figure included about $0.60 per share from International Emergency Economic Powers Act (IEEPA) tariff refunds. Excluding that one-time benefit, EPS was roughly $2.06 — still comfortably above management's guidance of $1.85–$1.93 and analyst consensus of about $1.93–$1.95. Net income reached $851 million, up from $508 million a year earlier.

Profitability improved sharply. Operating margin expanded 610 basis points, including about 405 basis points from the tariff refunds; excluding that benefit, operating margin still rose 205 basis points, ahead of the company's own plan. Gross margin increased 625 basis points, helped by higher merchandise margins and lower distribution costs. Inventory rose 18% year over year, which management attributed to supporting stronger traffic and broader assortments while maintaining fast inventory turns.

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Market Reaction and Investor Sentiment

The market responded positively to the report, with Ross Stores shares gaining roughly 4% following the release. Investors appeared to reward the combination of a top- and bottom-line beat, a second straight quarter of double-digit comps, and an upwardly revised full-year outlook. Sentiment was further supported by management's commentary that August trends remained encouraging and that recent store openings were performing ahead of expectations.

Still, some caution lingered. A meaningful portion of the margin and EPS upside came from the one-time tariff refund, and analysts noted ongoing freight and fuel cost headwinds as well as an 18% increase in inventory. The market's focus now shifts to whether traffic-led comps growth can continue against tougher comparisons in the back half of the year.

Forward Outlook and Key Factors to Monitor

Following the second quarter, Ross Stores raised its guidance for the remainder of fiscal 2026. Management now expects comparable store sales to increase 6–7% in the third quarter and 4–5% in the fourth quarter. Third-quarter EPS is projected at $1.75–$1.83, while fourth-quarter EPS is guided to $2.17–$2.26. Full-year EPS is now expected to land between $8.61 and $8.77, a figure that includes roughly $0.60 per share from the tariff refunds.

Several factors will be worth watching. First, the company faces more difficult year-over-year comparisons after two consecutive quarters of double-digit comps, so investors will monitor whether traffic growth and basket trends can sustain momentum. Second, cost pressures — particularly freight and fuel — could weigh on margins even as merchandise margins and distribution leverage provide offsets.

Store growth is another catalyst. Ross now plans to open 115 locations in 2026, up from a prior target of 110, with about 51 openings slated for the third quarter. Management indicated that new stores, including in the Northeast, have performed ahead of expectations. Finally, capital returns remain in focus, with the company on track to repurchase about $1.275 billion of stock during the fiscal year under its $2.55 billion authorization.

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