Ross Stores raises 2026 outlook after Q2 sales jump

Ross Stores (NASDAQ: ROST ) released second-quarter financial results and hosted an earnings call on Thursday.

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For comprehensive financial data and transcripts, visit View the webcast at Watch the full earnings call below: Summary Ross Stores Inc reported a strong second quarter with a 13% increase in total sales to $6.3 billion and a 10% rise in comparable store sales, driven by increased customer transactions.

The company plans to open 115 new locations in 2026, up from the previous guidance of 110, reflecting confidence in its expansion strategy.

Inventory levels increased by 18%, supporting higher sales and improved merchandise margins, with a focus on leveraging closeout opportunities.

Net income rose to $851 million from $508 million the previous year, with earnings per share at $2.66, benefiting from a $253 million tariff refund.

Ross Stores raised its guidance for the remainder of 2026, forecasting comparable store sales growth of 6% to 7% in the third quarter and 4% to 5% in the fourth quarter, with full-year earnings per share expected between $8.61 and $8.77.

The company emphasized the success of its customer acquisition efforts, with a notable increase in new and lapsed customer traffic and engagement across diverse demographics.

Management highlighted improved gross margins driven by tariff refunds and lower distribution costs, while noting some pressure from higher freight costs due to increased fuel prices.

Executive commentary was optimistic about the company's growth strategies, underscoring the strength of merchandising, marketing, and store initiatives in enhancing customer experience and driving sales.

Full Transcript Diego, Investor Relations Good afternoon and welcome to the Ross Stores Second Quarter 2026 Earnings Release Conference Call.

The call will begin with prepared comments by management followed by a question and answer session.

If anyone should require operator assistance, please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, new store openings, and other matters that are based on the company's current forecast of aspects of its future business.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations.

Risk factors are included in today's press release and in the company's fiscal 2025 Form 10-K and fiscal 2026 Forms 10-Q and 8-Ks on file with the SEC.

Now I'd like to turn the call over to Jim Conroy, Chief Executive Officer.

Jim Conroy, Chief Executive Officer Thank you, Diego, and good afternoon, everyone.

Joining me on our call today are Michael Hartshorn, Group President and Chief Operating Officer; Bill Sheehan, Executive Vice President and Chief Financial Officer; and Connie Kao, Senior Vice President, Investor Relations.

Before discussing our results, I want to recognize the outstanding team across the company and throughout the country.

The robust sales and earnings growth in the quarter are a direct reflection of your hard work and commitment to the ROST organization.

Thank you.

Now turning to our results, we are extremely pleased with the 10% comparable store sales growth we delivered in the second quarter, marking the second quarter in a row with double-digit comp growth.

Sales were strong in May and improved sequentially each month, with July delivering our strongest performance.

Despite cycling a strong back-to-school performance last year, customer traffic once again served as a primary driver of our comparable store sales increase, which underscores the durability of our growth and the momentum we are building.

We believe the increased traffic reflects the effectiveness of our customer acquisition efforts.

During the quarter we saw gains from new and lapsed customers along with more frequent trips and higher spending from existing customers, reflecting deeper engagement with both of our chains.

Importantly, the new customers we are attracting span a broad range of income demographics and age cohorts, including younger shoppers, which we believe reflects the broad appeal of our brand and the success of our marketing efforts in reaching and engaging a diverse customer base.

Once in our stores, both new and existing customers are responding to our compelling values and a broader selection of fashion and brands.

The merchants and planners have done a terrific job of opening new vendors and satisfying the demands of a wide variety of customers.

Finally, our stores organization has done an excellent job enhancing the in-store shopping experience and managing the elevated sales volumes.

We feel great about the early success of our growth strategies and have confidence in our ability to continue to gain market share consistent with the trends we saw in recent quarters.

The strong performance at Ross was broad-based across both merchandise categories and geographies in the second quarter.

Home and cosmetics were our strongest businesses.