TLDR
- Ross Stores posted Q1 sales of $6.01 billion, up 21% year-over-year, beating the Wall Street estimate of $5.64 billion.
- Same-store sales surged 17%, well above the 9.4% analysts had expected, driven by more customer visits and higher tax refund spending.
- EPS came in at $2.02, up 37% and far ahead of guidance of $1.60–$1.67 and the analyst estimate of $1.73.
- Operating margin expanded to 13.4%, above the company’s own forecast of 11.8%–12.1%.
- Ross raised its full-year fiscal 2026 outlook, now projecting same-store sales growth of 6%–7% and EPS of $7.50–$7.74, up 13%–17% from last year.
Ross Stores stock jumped 5.3% in premarket trading Friday to above $228, after the off-price retailer delivered first-quarter results that beat Wall Street across every major metric.
Total sales for the quarter ending in early May rose 21% to $6.01 billion. Analysts had expected $5.64 billion.
Same-store sales grew 17% — more than double the 9.4% consensus estimate. CEO Jim Conroy said the growth was “broad-based” across merchandise categories, income levels, age groups, and regions.
“Momentum was solid throughout the quarter,” Conroy said. He credited customer traffic as the primary driver, alongside stronger marketing and an improved in-store experience.
Tax refunds also helped. Conroy said higher consumer spending tied to tax refunds gave sales a lift in the period.
$ROST | Ross Stores Inc., Q1-2027 Earning Report pic.twitter.com/cak9CNc9HX
— Hardik Shah (@AIStockSavvy) May 21, 2026
EPS came in at $2.02, up 37% from $1.47 a year ago. That blew past both the company’s own guidance of $1.60–$1.67 and the analyst estimate of $1.73.
Operating margin hit 13.4%, well above Ross’ forecast of 11.8%–12.1%, driven largely by merchandise margin gains and occupancy leverage on strong sales.
Net income for the quarter rose to $650 million, up from $479 million in the prior-year period.
What Drove the Numbers
Every major merchandise category posted comparable sales growth in the teens or higher. Ladies and cosmetics were the standout performers, with Conroy citing new brands and Korean beauty trends as tailwinds in cosmetics.
The company’s dd’s DISCOUNTS chain also delivered solid top-line growth across categories and regions. Geographically, the Midwest led, but strength was seen across the country.
Conroy said customer count on a comparable-store basis was up double digits, with gains across income levels, ethnicities, and age groups — including younger shoppers. “The health of our comp has been driven by transactions for the third consecutive quarter,” he said.
On the cost side, merchandise margin improved 85 basis points, and occupancy costs leveraged 60 basis points on the strong sales base. Higher fuel prices limited some freight cost benefits, and incentive pay rose in line with the earnings outperformance.
Ross ended the quarter with consolidated inventories up 12%. Packaway inventory was 36% of the total, down from 41% a year ago. Conroy described closeout availability as “outstanding.”
Store Growth and Guidance
Ross ended Q1 with 2,282 stores, adding 17 new locations across 11 states. The company plans to open approximately 110 new stores in fiscal 2026, a roughly 5% expansion. That includes around 85 Ross locations and 25 dd’s DISCOUNTS stores, net of 10–15 closures or relocations.
For Q2, Ross projects same-store sales growth of 6%–7% and EPS of $1.85–$1.93, up 19%–24% from a year ago. Total Q2 sales are expected to rise 9%–11%.
For the full fiscal year 2026, Ross raised guidance to same-store sales growth of 6%–7% and EPS of $7.50–$7.74, up from $6.61 last year.
Conroy noted the quarter marked “the highest same-store sales growth in the company’s 40-year history.”
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