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Ross Stores (ROST) · Q2 2026 results and valuation
Share price: $241.27 · 2026-11-11
Ross Stores operates off-price retail stores under the Ross Dress for Less and dd’s DISCOUNTS brands. The company sells brand-name apparel, footwear, and home fashions to value-driven customers in the United States. Source: 10-K annual report (2026-03-31)
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q2 2027 · published 20 Aug 2026 and 21 May 2026
Net income up 31.0% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
+31.0%
Net income vs Q1 2026
Outlook given
Net income 851.3M vs 650.0M
Revenue +4.2%
Against the same quarter last year (Q2 2025) it is +67.6%, so it is not just seasonal.
Why Against the same quarter last year (+67.6%), net income rose primarily because gross margin improved by 625 basis points driven by 405 basis points of tariff refunds, while total sales grew 13% and distribution costs were lower by 100 basis points.
2 · How management spoke
Upbeat
More upbeat than 80% of company calls
Answers to analysts: upbeat, in line with the script.
Last call it was different: the answers were less upbeat than the script.
3 · What stood out
Ross Stores increased its 2026 expansion plans from 110 to 115 locations.
Valuation
Is Ross Stores undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-01-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 6.8% growth a year (3-year revenue growth), the model's fair value is $139.13 a share — the stock trades 73% above it. Today's price assumes 14.7% growth a year.
Current price
$241.27
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+14.7% for 10 yrs
Fair value / share
$139.13
Buy below
$104.35
Price vs fair value
Overvalued 73%
Price vs buy-below price
Overvalued 131%
Read between the lines
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Guidance
Full-year earnings per share are now forecast to be in the range of $8.61 to $8.77, compared to $6.61 last year.
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Figure
Comparable store sales grew by 10% in the second quarter, marking the second consecutive quarter with double-digit growth.
Source quote
“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.”
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Guidance
The company increased its 2026 expansion plans from 110 to 115 locations.
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Figure
Total sales grew 13% to $6.3 billion and comparable store sales increased 10% during the period.
Source quote
“Total sales for the period grew 13% to $6.3 billion, with comparable store sales increasing 10%.”
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Key theme
Efforts led to higher sales and improved merchandise margins while maintaining fast inventory turns.
Source quote
“These efforts are leading to higher sales and improved merchandise margins while maintaining fast inventory turns.”
2 more
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Key theme
Growth in the quarter was driven mostly by more transactions.
Source quote
“It's really driven mostly by more transactions.”
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Key theme
Management stated they have only begun to tap into the full growth potential of the business.
Source quote
“We believe we have only begun to tap into the full growth potential of the business.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“I can tell you, I'm personally very bullish on AI, but I also see tremendous opportunity for us to just execute on basic blocking and tackling and continuing to improve...”
“Comparable store sales are now expected to increase 4% to 5% on top of a robust 9% increase 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.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-08-01)
| Metric | Q2 2026period end 2026-08-01 | Q1 2026period end 2026-05-02 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 6.26B | 6.01B | +4.2% | 5.53B | +13.3% |
| Gross profit | 2.12B | 1.78B | +19.1% | 1.53B | +38.8% |
| Operating income | 1.10B | 804.0M | +37.3% | 638.3M | +72.9% |
| Net income | 851.3M | 650.0M | +31.0% | 508.0M | +67.6% |
| EPS | 2.66 | 2.02 | +31.7% | 1.56 | +70.5% |
| P/E today 27.9 | 30.4 | 32.0 | −1.6 | 21.7 | +8.7 |
Topics
Most discussed now
- The new customers Ross Stores is attracting span a broad range of income demographics and age cohorts, including younger shoppers,...
- Customer traffic once again served as a primary driver of Ross Stores' comparable store sales increase, which underscores the durability…
- Merchandise margin increased by 110 basis points, while distribution costs were lower by 100 basis points given favorable timing of...
- The quarter was really solid, and Ross Stores is thrilled by not only the underlying growth number, the 10% comp, but the...
- Ross Stores continues to believe that it shouldns't be concerned about cycling strong comps.
Faded since Q1 2026
- Dropped It was a remarkable group effort, and I couldn't be more proud of the teamwork demonstrated across the entire organization.
- Fading Ross Stores' stores team executed extremely well in supporting the increased product flow and customer activity.
- Fading Merchandise margin improved by 85 basis points, while occupancy leveraged by 60 basis points on the strong sales results.
- Fading Quarter net income was $650 million compared to $479 million last year, and earnings per share rose 37% to...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Ross Stores, Inc. announced the retirement of director Sharon D. Garrett and the appointment of Shelley H. Bransten and Christian B. Johnson to the Board, increasing the total number of members to ten.
- Results of operations · SEC 8-K
The company issued a press release on August 20, 2026, regarding its financial results for the fiscal quarter ended August 1, 2026.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
The company issued a press release on May 21, 2026, regarding its financial results for the fiscal quarter ended May 2, 2026.
- Results of operations · SEC 8-K
The company issued a press release on March 3, 2026, regarding its financial results for the fiscal quarter and fiscal year ended January 31, 2026.
- Director or officer change; Regulation FD disclosure · SEC 8-K
Michael Balmuth will step down as Executive Chairman and Board member on January 31, 2026, while K. Gunnar Bjorklund will be appointed as Chairman of the Board effective February 1, 2026.
- Results of operations · SEC 8-K
The company issued a press release on November 20, 2025, regarding its financial results for the fiscal quarter ended November 1, 2025.
- Director or officer change · SEC 8-K
William Sheehan will be appointed as Executive Vice President and Chief Financial Officer effective October 1, 2025, replacing Adam Orvos who is retiring on September 30, 2025.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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2026
opening 115 locations
Source quote
“We are now planning to open 115 locations in 2026, up from 110 in our prior guidance.”
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2026
buy back a total of $1.275 billion in stock
Source quote
“We remain on track to buy back a total of $1.275 billion in stock during 2026.”
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third quarter
forecasted to increase 6% to 7% with earnings per share expected to be in the range of $1.75 to $1.83
Source quote
“forecasted to increase 6% to 7% in the third quarter, with earnings per share expected to be in the range of $1.75 to $1.83, versus $1.58 last year.”
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third quarter of 2026
total sales are forecast to increase 9% to 11% versus the prior year
Source quote
“Our guidance assumptions for the third quarter of 2026 reflect total sales are forecast to increase 9% to 11% versus the prior year.”
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third quarter
operating margin planned to be in the range of 11.7% to 12.0%
Source quote
“If same-store sales perform in line with our forecast, operating margin for the third quarter is planned to be in the range of 11.7% to 12.0% compared to 11.6% last year.”