TLDR
- Ross Stores Q2 sales rose 13% to $6.3 billion, with comparable-store sales up 10%
- EPS came in at $2.06, beating estimates of $1.93; net income jumped to $851.3 million
- A $253 million tariff refund under IEEPA boosted EPS by around 60 cents
- Full-year EPS forecast raised to $8.61-$8.77; store-opening plan increased to 115 locations
- ROST stock jumped over 8% in premarket trading; Jefferies raised its price target to $285
Ross Stores posted a strong second quarter, sending the stock up more than 8% in premarket trading on Friday. ROST was trading around $248 before the open, up from a close of $228.99.
Q2 revenue came in at $6.26 billion, up 13% year-over-year and ahead of the $6.15 billion consensus estimate. Comparable-store sales jumped 10%, driven mainly by higher customer traffic.
Earnings per share of $2.06 topped the Zacks consensus estimate of $1.93 and came in well above the $1.56 reported a year ago. That marks a 6.74% earnings surprise.
ROSS STORES $ROST Q2’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $6.3B (Est. $6.15B) 🟢; +13% YoY
🔹 EPS: $2.66; includes $0.60 benefit from IEEPA tariff refunds
🔹 Comparable Store Sales: +10% YoY
🔹 Net Income: $851M; +68% YoYRaises FY26 Guide:
🔹 EPS: $8.61-$8.77 (Est. $7.78) 🟢
🔹…— Wall St Engine (@wallstengine) August 20, 2026
Net income for the quarter reached $851.3 million, up from $508 million in the same period last year. Operating income rose to $1.1 billion from $638.3 million.
Tariff Refund Gave Results a Boost
A chunk of that profit improvement came from an unexpected source. Ross received around $253 million in refunds of tariffs imposed under the International Emergency Economic Powers Act.
That windfall added roughly 60 cents to diluted EPS. Excluding the tariff benefit, operating margin still expanded by 205 basis points.
The company has now beaten consensus EPS estimates in each of the last four quarters. The previous quarter saw an even bigger earnings surprise of 18.82%.
For the first half of fiscal 2026, total sales rose 17% to $12.3 billion. Comparable-store sales were up 13% and net income climbed to $1.5 billion from $987.2 million a year earlier.
Outlook Raised, Store Expansion Plans Grow
Management lifted the full-year EPS forecast to $8.61-$8.77, which includes the tariff-related gain. For Q3, the company expects comparable-store sales growth of 6%-7% and EPS of $1.75-$1.83. Q4 guidance calls for 4%-5% comps and EPS of $2.17-$2.26.
Ross also raised its 2026 store-opening target to 115 locations, up from prior plans. That includes around 90 Ross Dress for Less stores and 25 dd’s Discounts locations. The company opened 47 stores in Q2 alone.
On the buyback front, Ross repurchased 1.4 million stock units for $319 million during the quarter and remains on track to return $1.275 billion to stockholders this fiscal year.
Jefferies raised its price target on ROST to $285 from $265 following the results, calling it “another blowout top-line quarter.” The firm said it remains confident in further upside from here.
ROST has gained about 30.3% year-to-date, compared to a 12.6% gain for the S&P 500.
Peer Burlington Stores (BURL) reports its own Q2 results on August 27. Wall Street expects Burlington to post EPS of $2.18, up 37.1% year-over-year, on revenues of $3.02 billion.
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