Ross Stores (NASDAQ:ROST) Releases Quarterly Earnings Results, Beats Estimates By $0.71 EPS

Ross Stores (NASDAQ:ROST) announced its earnings results on Thursday. The apparel retailer reported $2.66 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.95 by $0.71, Briefing.com reports. The firm had revenue of $6.26 billion for the quarter, compared to analyst estimates of $6.16 billion. Ross Stores had a net margin of 10.85% and a return on equity of 40.28%. The business’s revenue was up 13.3% compared to the same quarter last year. During the same quarter in the prior year, the business posted $1.56 EPS.

Here are the key takeaways from Ross Stores’ conference call:

• Second-quarter comparable sales rose 10%, marking the second consecutive quarter of double-digit growth. Gains were broad-based across categories and geographies, driven primarily by higher transactions from new, returning, and more frequent customers.
• Gross margin expanded 625 basis points and operating margin improved 610 basis points, although 405 basis points of the gross-margin benefit came from tariff refunds. Excluding the refunds, operating margin still increased 205 basis points year over year.
• Management raised its outlook, forecasting third-quarter comps of 6%-7%, fourth-quarter comps of 4%-5%, and full-year EPS of $8.61-$8.77 versus $6.61 last year. The company also increased its 2026 store-opening plan to 115 locations, supported by strong new-store performance, including in newer markets such as the Northeast.
• Inventories increased 18% as Ross expanded in-store assortments to support elevated traffic, while management said turns, clearance levels, and merchandise margins remained healthy. However, higher fuel prices are expected to pressure freight costs, and the company faces significantly tougher year-over-year comparisons in the second half.

Ross Stores Trading Up 4.4%

ROST opened at $239.04 on Friday. Ross Stores has a 1-year low of $143.39 and a 1-year high of $257.00. The company has a market cap of $76.68 billion, a P/E ratio of 28.94, a price-to-earnings-growth ratio of 2.30 and a beta of 0.86. The company has a fifty day moving average price of $233.81 and a two-hundred day moving average price of $221.86. The company has a current ratio of 1.54, a quick ratio of 0.94 and a debt-to-equity ratio of 0.12.

Ross Stores Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Tuesday, September 8th will be paid a $0.445 dividend. The ex-dividend date is Tuesday, September 8th. This represents a $1.78 annualized dividend and a dividend yield of 0.7%. Ross Stores’s payout ratio is currently 21.55%.

Institutional Trading of Ross Stores

Several hedge funds have recently bought and sold shares of ROST. State Street Corp increased its stake in Ross Stores by 0.7% during the 4th quarter. State Street Corp now owns 13,911,953 shares of the apparel retailer’s stock valued at $2,506,099,000 after purchasing an additional 99,975 shares in the last quarter. Bank of America Corp DE raised its holdings in Ross Stores by 20.9% during the second quarter. Bank of America Corp DE now owns 9,582,401 shares of the apparel retailer’s stock worth $1,222,523,000 after buying an additional 1,657,008 shares during the last quarter. Morgan Stanley lifted its stake in shares of Ross Stores by 1.5% in the fourth quarter. Morgan Stanley now owns 5,436,788 shares of the apparel retailer’s stock valued at $979,384,000 after buying an additional 79,519 shares in the last quarter. Viking Global Investors LP lifted its stake in shares of Ross Stores by 9.9% in the second quarter. Viking Global Investors LP now owns 4,747,639 shares of the apparel retailer’s stock valued at $605,704,000 after buying an additional 426,370 shares in the last quarter. Finally, Invesco Ltd. grew its holdings in shares of Ross Stores by 1.5% during the fourth quarter. Invesco Ltd. now owns 4,726,610 shares of the apparel retailer’s stock valued at $851,451,000 after buying an additional 70,678 shares during the last quarter. Institutional investors and hedge funds own 86.86% of the company’s stock.

Key Headlines Impacting Ross Stores

Here are the key news stories impacting Ross Stores this week:

• Positive Sentiment: Q2 results exceeded expectations: Ross reported diluted EPS of $2.66 versus the approximately $1.95 consensus estimate, while revenue rose 13.3% year over year to $6.26 billion, ahead of the $6.16 billion forecast. Comparable-store sales increased 10%, supported by stronger customer traffic, improved merchandising and higher margins. Ross Stores Q2 Earnings Top Estimates on Strong Sales Growth Momentum
• Positive Sentiment: Higher outlook signals continued momentum: Management raised fiscal 2026 EPS guidance to $8.61-$8.77, well above the prior outlook and the roughly $7.31 analyst consensus. Third- and fourth-quarter EPS guidance also came in above expectations. The company cited resilient demand for discounted apparel and accessories and raised its fiscal-year store-opening plan to 115 locations. Ross Stores raises annual profit forecast again on discounted apparel demand
• Positive Sentiment: Analysts raised price targets: JPMorgan increased its target to $272 and maintained an Overweight rating, while Robert W. Baird raised its target to $270 and kept an Outperform rating. These revisions reinforce expectations that Ross is gaining market share from rivals. Analysts Boost Forecasts on Ross Stores
• Neutral Sentiment: Approximately $253 million of tariff refunds benefited second-quarter operating income, creating a potential comparison headwind when assessing underlying profitability. Ross Stores Q2 Sales Rise 13% as Diluted EPS Reaches $2.66
• Negative Sentiment: BTIG analyst Robert Drbul reiterated a Hold rating, indicating that strong execution may already be reflected in ROST’s premium valuation. Recent insider activity also showed sales but no purchases, a modest sentiment caution. Analyst Reiterates Hold on Ross Stores

Analysts Set New Price Targets

ROST has been the subject of several research analyst reports. Robert W. Baird boosted their target price on Ross Stores from $250.00 to $270.00 and gave the stock an “outperform” rating in a research note on Friday. Evercore set a $290.00 price target on Ross Stores in a research note on Friday. JPMorgan Chase & Co. boosted their price objective on Ross Stores from $262.00 to $272.00 and gave the stock an “overweight” rating in a research report on Friday. Truist Financial upped their target price on Ross Stores from $290.00 to $310.00 and gave the stock a “buy” rating in a report on Friday. Finally, Citigroup increased their target price on Ross Stores from $270.00 to $290.00 and gave the company a “buy” rating in a research report on Friday. Fifteen analysts have rated the stock with a Buy rating and six have given a Hold rating to the company’s stock. According to MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $263.76.

Ross Stores Company Profile

Ross Stores, Inc (NASDAQ: ROST) is an American off‑price retailer headquartered in Dublin, California, that operates the Ross Dress for Less and dd’s DISCOUNTS store formats. The company sells a broad assortment of apparel, footwear, home fashions, accessories and other soft goods, positioning itself as a value-oriented destination for brand‑name and fashion merchandise at reduced prices.

Ross’s business model centers on opportunistic buying of excess inventory, closeouts, cancelled orders and overstocks from manufacturers, department stores and other suppliers.