Ross Stores reported strong Q2 fiscal 2026 results with significant sales and earnings growth, driven by comparable store sales increases, tariff refunds, and new store openings. The company increased its store opening plan for fiscal 2026 and maintained strong liquidity and capital return programs.

• Ross Stores reported Q2 fiscal 2026 sales of $6.265 billion, a 13% increase over the prior year period, driven by a 10% increase in comparable store sales and growth in non-comp store sales [N3].
• Operating income for Q2 fiscal 2026 was $1.104 billion, or 17.6% of sales, including a $253 million benefit from tariff refunds, compared to 11.5% of sales in the prior year [N3].
• Net earnings for Q2 fiscal 2026 were $851 million, with diluted EPS of $2.66, reflecting a 68% increase in net earnings and share repurchases [N3].
• Ross opened 47 new stores in Q2 fiscal 2026 and increased its store opening plan to approximately 115 new stores for the year, reflecting expansion across both brands [N3].
• The company maintains a strong liquidity position with $4.3 billion in unrestricted cash and equivalents and $1.3 billion available under its credit facility as of August 1, 2026 [N3].
• Ross repurchased 2.9 million shares for $637.5 million in the six months ended August 1, 2026, under a $2.55 billion repurchase program approved in March 2026 [N3].
• Ross declared quarterly cash dividends of $0.4450 per share in 2026, continuing its dividend payments [N3].

Ross Stores demonstrates strong sales growth driven by comparable store sales increases and new store openings, reflecting effective merchandising and marketing initiatives. The company benefits from tariff refunds that have improved gross margins and operating income. Its disciplined capital allocation includes significant share repurchases and consistent dividend payments, supported by robust cash flow generation and liquidity. Expansion plans include opening approximately 115 new stores in fiscal 2026, indicating confidence in market penetration and growth opportunities. Operational improvements in cost management and store experience enhancements support profitability [S2][N3].

Ross faces risks from ongoing legal proceedings, including class action lawsuits related to wage and hour laws and other regulatory matters, which could result in financial or reputational impacts. The retail environment remains competitive, with pressure on pricing and consumer spending patterns potentially affecting sales and margins. Tariff-related benefits may not recur, which could impact cost of goods sold. Capital expenditures and store expansion require effective execution to avoid dilution of returns. Changes in consumer preferences or economic downturns could adversely affect traffic and basket size [S1][S2].

Ross Stores' moat is anchored in its scale as the largest off-price apparel and home fashion retailer in the U.S., with a broad and diverse store footprint and a well-established supply chain network. Its ability to source first-quality, in-season branded merchandise at significant discounts and its focus on value-oriented customers create a competitive advantage. The company's operational efficiencies, including inventory management and distribution, support margin resilience. Additionally, Ross's brand recognition and customer loyalty in the off-price segment contribute to its market position [S1][S2].

• Legal and Regulatory Risks: Ross is subject to class and representative action lawsuits primarily related to wage and hour laws, as well as other legal and regulatory proceedings that could pose financial or operational challenges [S1].
• Competitive Retail Environment: The off-price retail sector is competitive, and shifts in consumer behavior or economic conditions could impact sales growth and profitability [S2].
• Tariff and Cost Risks: The recent benefit from IEEPA tariff refunds may not continue, potentially increasing cost of goods sold and affecting margins [S2].
• Execution Risks in Expansion: The company's growth strategy involves opening new stores and investing in supply chain infrastructure, which requires effective execution to maintain profitability and operational efficiency [S2].

• Ross Stores, Inc. operates two off-price retail apparel and home fashion store brands: Ross Dress for Less and dd's DISCOUNTS [S2].
• As of August 1, 2026, Ross operated 1,952 Ross Dress for Less stores in 44 states, DC, Guam, and Puerto Rico, and 376 dd's DISCOUNTS stores in 23 states [S2].
• Ross offers first-quality, in-season, brand name and designer apparel, accessories, footwear, and home fashions at 20% to 60% off department and specialty store prices; dd's DISCOUNTS offers a more moderately priced assortment at 20% to 70% off moderate department and discount store prices [S2].
• In Q2 fiscal 2026, sales were $6.265 billion, a 13% increase over Q2 fiscal 2025, driven by a 10% comparable store sales increase and non-comp store sales growth [S2].
• Operating income for Q2 fiscal 2026 was $1.104 billion (17.6% of sales), up from $638 million (11.5% of sales) in Q2 fiscal 2025, including a $253 million benefit from refunds of IEEPA tariffs paid [S2].
• Net earnings for Q2 fiscal 2026 were $851 million, compared to $508 million in Q2 fiscal 2025; diluted EPS was $2.66 versus $1.56, reflecting higher earnings and share repurchases [S2].
• Ross opened 47 new stores in Q2 fiscal 2026 (35 Ross and 12 dd's DISCOUNTS) and increased its store opening plan to approximately 115 new stores for the year [S2].
• Cost of goods sold as a percentage of sales decreased by approximately 625 basis points in Q2 fiscal 2026 compared to Q2 fiscal 2025, primarily due to tariff refunds and improved merchandise margin [S2].
• Selling, general and administrative expenses increased in absolute terms but were relatively stable as a percentage of sales, with slight increases due to higher incentive compensation and store-related costs [S2].
• Ross maintains a strong liquidity position with $4.3 billion in unrestricted cash and equivalents as of August 1, 2026, and $1.3 billion available under its credit facility [S2].
• As of August 1, 2026, Ross had $1.0 billion in outstanding Senior Notes, with $242 million maturing in 2027 [S2].
• Ross repurchased 2.9 million shares for $637.5 million in the six months ended August 1, 2026, under a $2.55 billion stock repurchase program approved in March 2026 [S2].
• Ross declared quarterly cash dividends of $0.4450 per share in 2026, with payments continuing regularly [S2].
• Ross's fiscal year ends on the Saturday nearest January 31, following a 52-53 week calendar [S1].
• Ross's business model focuses on off-price retailing with a broad merchandise assortment, supported by a network of distribution centers and buying offices [S1].
• Ross's financial statements show consistent net earnings growth over recent years, with $2.145 billion net earnings for fiscal 2025 [S1].
• Ross has ongoing legal proceedings including class action lawsuits related to wage and hour laws, and other regulatory matters, which management believes will not materially affect financial condition [S1].
• Ross's capital expenditures for fiscal 2026 are planned at approximately $1.1 billion, including new store openings and supply chain investments [S2].
• Ross's effective tax rate was approximately 25% in Q2 fiscal 2026, slightly higher than the prior year period due to tax position resolutions [S2].
• Ross's inventory includes packaway merchandise stored for less than six months, representing about 36% of total inventory as of August 1, 2026 [S2].