Key Highlights
- First-quarter revenue reached $6.01 billion, representing a 21% year-over-year increase and exceeding Wall Street’s $5.64 billion projection.
- Comparable store sales climbed 17%, significantly outperforming the 9.4% consensus forecast, fueled by increased foot traffic and elevated tax refund expenditures.
- Earnings per share reached $2.02, a 37% increase that surpassed both internal guidance of $1.60–$1.67 and analyst expectations of $1.73.
- The operating margin reached 13.4%, exceeding the retailer’s projected range of 11.8%–12.1%.
- Management elevated fiscal 2026 projections, now anticipating comparable sales growth of 6%–7% and earnings per share between $7.50–$7.74, representing 13%–17% growth year-over-year.
Shares of Ross Stores climbed 5.3% during premarket activity on Friday, reaching above $228, following the discount retailer’s first-quarter performance that exceeded analyst expectations across all key financial indicators.
Quarterly revenue for the period concluding in early May increased 21% to $6.01 billion, surpassing the $5.64 billion analyst consensus.
Comparable store sales expanded 17% — significantly exceeding the 9.4% Wall Street forecast. Chief Executive Officer Jim Conroy attributed the performance to “broad-based” strength spanning product lines, customer demographics, age cohorts, and geographic markets.
“Performance remained robust throughout the entire quarter,” Conroy stated. He highlighted customer traffic as the key growth catalyst, supplemented by enhanced marketing initiatives and superior store operations.
Tax season dynamics contributed positively. According to Conroy, elevated consumer expenditure linked to tax refund distributions provided meaningful momentum during the reporting period.
Earnings per share totaled $2.02, marking a 37% increase from the prior year’s $1.47. This result significantly exceeded the company’s internal projection of $1.60–$1.67 and the analyst consensus of $1.73.
The operating margin reached 13.4%, well above management’s forecasted range of 11.8%–12.1%, primarily attributed to improved merchandise margins and favorable occupancy expense leverage on the robust sales volume.
Net earnings for the quarter advanced to $650 million, compared with $479 million in the corresponding year-ago period.
Performance Drivers Behind the Results
All primary merchandise segments delivered comparable sales increases in the double-digit range. Women’s apparel and cosmetics emerged as top performers, with Conroy highlighting new brand introductions and Korean beauty product trends as significant contributors to cosmetics growth.
The dd’s DISCOUNTS banner also generated strong revenue expansion across all categories and regional markets. The Midwest region demonstrated the strongest performance, though positive results were evident nationwide.
Conroy emphasized that customer transactions on a comparable-store basis increased by double digits, with improvements spanning income brackets, ethnic backgrounds, and age demographics — notably including younger consumers. “Transaction growth has powered our comparable sales performance for three consecutive quarters,” he noted.
Regarding profitability, merchandise margins improved by 85 basis points, while occupancy expenses leveraged 60 basis points due to the strong revenue foundation. Elevated fuel costs partially offset freight savings, and incentive compensation increased proportionally with the earnings outperformance.
The company concluded the quarter with total inventory up 12%. Packaway inventory represented 36% of total stock, declining from 41% in the prior year. Conroy characterized closeout merchandise availability as “exceptional.”
Expansion Plans and Updated Outlook
Ross operated 2,282 locations at quarter-end, having added 17 stores across 11 states. The retailer plans approximately 110 new store openings during fiscal 2026, representing roughly 5% unit growth. This includes approximately 85 Ross locations and 25 dd’s DISCOUNTS units, net of 10–15 closures or relocations.
For the second quarter, management projects comparable sales growth of 6%–7% and earnings per share ranging from $1.85–$1.93, representing 19%–24% year-over-year growth. Total second-quarter revenue is anticipated to increase 9%–11%.
For full fiscal year 2026, Ross elevated its outlook to comparable sales growth of 6%–7% and earnings per share of $7.50–$7.74, up from $6.61 in the previous fiscal year.
Conroy emphasized that the quarter delivered “the strongest same-store sales expansion in the company’s four-decade history.”
