Ross Stores, Inc. (ROST) Q1 2026: Strong Sales and Earnings Beat Guidance — Positive Outlook

Ross Stores, Inc. (Nasdaq: ROST) reported impressive financial results for the first quarter of fiscal 2026, significantly exceeding both sales and earnings expectations. Total sales for the quarter reached $6.0 billion, marking an increase of $1.0 billion or 21% compared to $5.0 billion in the same quarter last year. This robust performance was complemented by a 17% rise in comparable store sales, a notable improvement from flat sales in the prior year.

The quarter's earnings per share (EPS) also showcased strong growth, coming in at $2.02, which is a 37% increase from $1.47 in the previous year. This result surpassed the company's guidance of $1.60 to $1.67, indicating a solid operational performance and effective cost management.

Analyst View

This quarter is undoubtedly a positive outcome for shareholders. The significant increase in both sales and earnings reflects strong consumer demand and effective execution of the company's strategies. The increase in operating margin to 13.4%, well above the planned range of 11.8% to 12.1%, further underscores the company's operational efficiency and ability to capitalize on market opportunities.

Key metrics from the quarter include:

• Total Sales: $6.0 billion (up from $5.0 billion in Q1 2025)
• Comparable Store Sales: +17% (compared to flat sales last year)
• Net Income: $650 million (up from $479 million last year)
• Earnings Per Share: $2.02 (up from $1.47 last year)
• Operating Margin: 13.4% (above the planned range)

Shareholder Payouts and Guidance

During the first quarter, Ross Stores repurchased 1.5 million shares for an aggregate price of $319 million as part of its two-year $2.55 billion share buyback authorization. The company remains on track to buy back a total of $1.275 billion in common stock during fiscal 2026, which should enhance shareholder value.

Looking ahead, Ross Stores provided solid guidance for the second quarter, forecasting comparable store sales growth of 6% to 7%. If achieved, this would translate to projected earnings per share of $1.85 to $1.93, representing a growth of 19% to 24% compared to $1.56 for the second quarter ended August 2, 2025. Additionally, the company has increased its fiscal 2026 same-store sales growth outlook to 6% to 7%, building on a 5% gain in 2025.

Forward Catalyst

Investors should keep an eye on the upcoming second quarter results, particularly the company's ability to maintain momentum in comparable store sales and manage costs effectively. The anticipated earnings growth and continued share repurchase program are likely to be key drivers of shareholder value in the coming quarters. Furthermore, any updates on new store openings or expansions could provide additional insights into the company's long-term growth strategy.

In summary, Ross Stores' first quarter results reflect a strong start to fiscal 2026, with robust sales and earnings growth that exceeded expectations. The company's proactive measures in share repurchases and optimistic guidance for the upcoming quarter position it well for continued success.

Condensed Consolidated Statements of Earnings ($000, except stores and per share data, unaudited)

Note: All amounts are in thousands.

	Three Months Ended
	May 2, 2026	May 3, 2025
Sales	$ 6,010,476	$ 4,984,971
Costs and Expenses
Cost of goods sold	4,230,589	3,581,366
Selling, general and administrative	975,861	797,135
Operating income	804,026	606,470
Interest income, net	-33,449	-34,409
Earnings before taxes	837,475	640,879
Provision for taxes on earnings	187,511	161,630
Net earnings	$ 649,964	$ 479,249
Earnings per share
Basic	$ 2.04	$ 1.48
Diluted	$ 2.02	$ 1.47
Weighted-average shares used to compute net income per share, basic	318,957	324,877
Diluted	321,231	327,005
Store count at end of period	2,282	2,205

Condensed Consolidated Balance Sheets ($000, unaudited)

Note: All amounts are in thousands.

Assets	May 2, 2026	May 3, 2025
Cash and cash equivalents	$ 4,130,216	$ 3,783,417
Accounts receivable	212,540	181,004
Merchandise inventory	2,976,915	2,669,806
Prepaid expenses and other	252,941	240,837
Total current assets	7,573,612	6,875,087
Property and equipment, net	4,147,577	3,827,575
Operating lease assets	3,531,345	3,325,862
Other long-term assets	301,542	276,123
Total assets	$ 15,554,076	$ 14,304,647
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$ 2,653,073	$ 2,163,974
Accrued expenses and other	696,511	616,008
Current operating lease liabilities	735,528	702,025
Accrued payroll and benefits	376,760	274,877
Income taxes payable	210,971	180,083
Current portion of long-term debt	241,344	498,812
Total current liabilities	4,914,837	4,435,703
Long-term debt	776,843	1,016,855
Non-current operating lease liabilities	2,969,777	2,797,911
Other long-term liabilities	292,944	268,698
Deferred income taxes	295,492	209,249
Common stock and additional paid-in capital	6,305,416	5,576,016
Total liabilities and stockholders' equity	$ 15,554,076	$ 14,304,647

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