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

Ross Stores (NASDAQ:ROST) released its quarterly earnings results on Thursday. The apparel retailer reported $2.66 EPS for the quarter, topping analysts’ consensus estimates of $1.95 by $0.71, Briefing.com reports. Ross Stores had a return on equity of 38.42% and a net margin of 9.74%.The business had revenue of $6.26 billion for the quarter, compared to analyst estimates of $6.16 billion. During the same period in the prior year, the company earned $1.56 EPS. Ross Stores’s revenue for the quarter was up 13.3% on a year-over-year basis.

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 Stock Down 2.4%

Shares of NASDAQ:ROST opened at $228.99 on Friday. The company has a debt-to-equity ratio of 0.12, a current ratio of 1.54 and a quick ratio of 0.94. The stock has a market cap of $73.46 billion, a price-to-earnings ratio of 31.98, a P/E/G ratio of 2.61 and a beta of 0.86. The company has a 50 day moving average of $233.83 and a 200-day moving average of $221.74. Ross Stores has a one year low of $143.39 and a one year high of $257.00.

Ross Stores Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Tuesday, September 8th will be given a dividend of $0.445 per share. The ex-dividend date is Tuesday, September 8th. This represents a $1.78 annualized dividend and a dividend yield of 0.8%. Ross Stores’s payout ratio is currently 24.86%.

Hedge Funds Weigh In On Ross Stores

Several large investors have recently bought and sold shares of the business. Woodline Partners LP grew its holdings in Ross Stores by 39.9% during the 1st quarter. Woodline Partners LP now owns 27,875 shares of the apparel retailer’s stock worth $3,562,000 after acquiring an additional 7,951 shares during the period. Geneos Wealth Management Inc. raised its position in shares of Ross Stores by 23.5% during the 1st quarter. Geneos Wealth Management Inc. now owns 615 shares of the apparel retailer’s stock valued at $79,000 after acquiring an additional 117 shares during the last quarter. NewEdge Advisors LLC lifted its stake in shares of Ross Stores by 35.8% in the 2nd quarter. NewEdge Advisors LLC now owns 10,581 shares of the apparel retailer’s stock valued at $1,350,000 after purchasing an additional 2,792 shares during the period. Treasurer of the State of North Carolina lifted its stake in shares of Ross Stores by 1.0% in the 2nd quarter. Treasurer of the State of North Carolina now owns 150,491 shares of the apparel retailer’s stock valued at $19,200,000 after purchasing an additional 1,508 shares during the period. Finally, Main Street Financial Solutions LLC boosted its position in shares of Ross Stores by 2.2% in the 2nd quarter. Main Street Financial Solutions LLC now owns 12,580 shares of the apparel retailer’s stock worth $1,605,000 after purchasing an additional 265 shares during the last quarter. 86.86% of the stock is currently owned by institutional investors and hedge funds.

Analysts Set New Price Targets

A number of brokerages recently weighed in on ROST. Sanford C. Bernstein reissued a “market perform” rating and issued a $230.00 price target on shares of Ross Stores in a report on Friday, May 22nd. Wall Street Zen downgraded Ross Stores from a “strong-buy” rating to a “buy” rating in a report on Saturday, June 20th. Guggenheim reaffirmed a “buy” rating and set a $290.00 price objective on shares of Ross Stores in a report on Monday, April 27th. Evercore reiterated an “outperform” rating and issued a $276.00 price objective on shares of Ross Stores in a research report on Monday. Finally, Deutsche Bank Aktiengesellschaft reissued a “buy” rating and issued a $257.00 target price on shares of Ross Stores in a research note on Friday, May 22nd. Sixteen investment analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. According to MarketBeat, Ross Stores presently has an average rating of “Moderate Buy” and an average target price of $244.76.

Trending Headlines about Ross Stores

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

• Positive Sentiment: Strong Q2 results: Revenue rose 13.3% year over year to approximately $6.26 billion, ahead of the $6.16 billion consensus estimate. Diluted EPS reached $2.66, up from $1.56 a year ago and well above the roughly $1.95 analyst forecast. Comparable-store sales increased 10%, supported by higher customer traffic. Ross Stores raises annual profit forecast again on discounted apparel demand
• Positive Sentiment: Guidance raised: Ross increased fiscal 2026 EPS guidance to $8.61-$8.77, substantially above the prior outlook and the cited $7.31 consensus estimate. Third-quarter EPS guidance of $1.75-$1.83 and fourth-quarter guidance of $2.17-$2.26 also exceed consensus expectations. Ross Stores Reports Strong Second Quarter Sales and Earnings Results
• Positive Sentiment: Expansion and customer momentum: The company opened 47 stores during the quarter and raised its fiscal-year opening plan to 115 locations. Management cited gains among both existing and new customers, reinforcing expectations that the off-price value proposition is attracting shoppers from mainstream retailers. Ross Posts 13% Sales Jump as Inflation Drives Shoppers to Off-Price Retailers
• Neutral Sentiment: Valuation remains a concern: BTIG reiterated a Hold rating, arguing that strong execution is already reflected in ROST’s premium valuation. Investors may therefore require continued earnings beats and guidance increases to support further upside. Analyst Reiterates Hold on Ross Stores
• Negative Sentiment: One-time benefit and insider selling: Results included approximately $253 million in tariff refunds, which may not recur. Separately, reported insider activity over the past six months consisted of sales rather than purchases, modestly tempering the otherwise bullish reaction.

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.