Ross Stores (ROST) ROST Financial Results Summary
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Ross Stores (ROST) Q2 2026: Strong Sales Growth and Earnings Beat — Positive Outlook
Ross Stores, Inc. (Nasdaq: ROST) reported impressive financial results for the second quarter of fiscal 2026, showcasing significant growth compared to the previous year. Total sales for the quarter reached $6.3 billion, an increase of $800 million or +13% from $5.5 billion in Q2 2025. This growth was bolstered by a robust 10% rise in comparable store sales, building on a 2% gain from the prior year.
This quarter's performance is undoubtedly a positive outcome for shareholders. The substantial increase in both sales and earnings per share (EPS) reflects the company's effective strategies and operational execution. EPS for the quarter was reported at $2.66, which includes an approximate $0.60 benefit from IEEPA tariff refunds, significantly exceeding the company's guidance of $1.85 to $1.93.
Key Financial Metrics:
- Total Sales: $6.3 billion, up from $5.5 billion (+13% YoY)
- Comparable Store Sales: +10% (compared to +2% last year)
- Net Income: $851 million, compared to $508 million last year
- Earnings Per Share: $2.66, compared to $1.56 in the prior year
- Operating Profits: $1.1 billion, including approximately $253 million from tariff refunds
- Operating Margin: Increased by 610 basis points, with 405 basis points attributed to tariff refunds
The results indicate that Ross Stores not only met but exceeded expectations, particularly in terms of profitability. The operating margin increase of 610 basis points is noteworthy, especially as it surpassed the company's plan for an increase of 130 to 150 basis points. Excluding the tariff refunds, the operating margin still increased by 205 basis points, demonstrating strong underlying performance.
Shareholder Returns and Future Guidance:
During the second quarter, Ross Stores repurchased 1.4 million shares for an aggregate price of $319 million under its two-year $2.55 billion authorization. The company remains on track to buy back a total of $1.275 billion in common stock during fiscal 2026, which is a positive signal for shareholders looking for returns on their investments.
Looking ahead, Ross Stores has raised its fiscal 2026 guidance. The company now expects comparable store sales to increase by 6% to 7% in Q3 and 4% to 5% in Q4. If these projections hold, the earnings per share for the third and fourth quarters are projected to be in the range of $1.75 to $1.83 and $2.17 to $2.26, respectively. The overall fiscal year EPS guidance has been increased to a range of $8.61 to $8.77, which again includes the approximate $0.60 benefit from tariff refunds recognized in Q2.
Forward-Looking Catalysts:
Investors should keep an eye on the company's continued expansion plans, as Ross Stores opened 47 new stores during the quarter and has increased its 2026 store opening plans to 115 locations. This includes approximately 90 Ross Dress for Less and 25 dd’s DISCOUNTS stores. The success of these new openings, along with the anticipated sales growth in the upcoming quarters, will be crucial for sustaining momentum.
In conclusion, Ross Stores' Q2 2026 results reflect a strong operational performance and a positive outlook for the remainder of the fiscal year. The combination of robust sales growth, increased profitability, and strategic share repurchases positions the company favorably for continued success. Investors should watch for the execution of the company's expansion strategy and the performance of comparable store sales in the upcoming quarters.
Note: All amounts in the following tables are in thousands.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($000, unaudited)
| Thirteen Weeks Ended August 1, 2026 | Thirteen Weeks Ended August 2, 2025 | Six Months Ended August 1, 2026 | Six Months Ended August 2, 2025 | |
|---|---|---|---|---|
| Total revenue | $6,313,388 | $5,583,760 | $12,300,096 | $10,539,078 |
| Cost of goods sold | 4,188,796 | 3,844,361 | 8,085,390 | 7,052,972 |
| Gross profit | 2,124,592 | 1,739,399 | 4,214,706 | 3,486,106 |
| Selling, general, and administrative expenses | 1,020,852 | 905,235 | 2,020,531 | 1,699,766 |
| Operating income | 1,103,740 | 834,164 | 2,194,175 | 1,786,340 |
| Other income (expenses) | (14,053) | (2,600) | (22,095) | (12,235) |
| Income before income taxes | 1,089,687 | 831,564 | 2,172,080 | 1,774,105 |
| Income tax expense | 238,266 | 323,651 | 509,293 | 787,230 |
| Net income | $851,421 | $507,913 | $1,662,787 | $986,875 |
| Earnings per share, basic | $2.66 | $1.56 | $4.69 | $3.03 |
| Earnings per share, diluted | $2.66 | $1.56 | $4.69 | $3.03 |
CONDENSED CONSOLIDATED BALANCE SHEETS ($000, unaudited)
| Assets | August 1, 2026 | August 2, 2025 |
|---|---|---|
| Current assets | ||
| Cash and cash equivalents | $4,288,773 | $3,847,039 |
| Accounts receivable | 248,140 | 210,520 |
| Merchandise inventories | 3,087,098 | 2,608,481 |
| Prepaid expenses and other | 252,726 | 259,815 |
| Total current assets | 7,876,737 | 6,925,855 |
| Property and equipment, net | 4,257,720 | 3,906,394 |
| Operating lease assets | 3,545,176 | 3,374,590 |
| Other long-term assets | 302,763 | 288,761 |
| Total assets | $15,982,396 | $14,495,600 |
| Liabilities and Stockholders' Equity | August 1, 2026 | August 2, 2025 |
|---|---|---|
| Current liabilities | ||
| Accounts payable | $2,621,810 | $2,205,610 |
| Accrued expenses and other | 744,284 | 655,218 |
| Current operating lease liabilities | 752,302 | 716,162 |
| Accrued payroll and benefits | 440,837 | 315,893 |
| Income taxes payable | 84,916 | — |
| Current portion of long-term debt | 241,459 | 499,122 |
| Total current liabilities | 4,885,578 | 4,392,055 |
| Long-term debt | 777,053 | 1,017,222 |
| Non-operating lease liabilities | 2,968,195 | 2,835,469 |
| Other long-term liabilities | 295,611 | 279,258 |
| Deferred income taxes | 312,557 | 238,985 |
| Commitments and contingencies | ||
| Stockholders' equity | ||
| Total liabilities and stockholders' equity | $15,982,396 | $14,495,600 |
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