Ross Stores (ROST) Q1 2026 earnings summary

Executive summary

• Sales grew 2.6% to $4.99 billion in Q1 FY2025, driven by 78 net new store openings, with comparable store sales flat and EPS up to $1.47 due to share repurchases; net income was $479 million, down from $488 million year-over-year.

• Operating margin remained flat at 12.2% year-over-year, with cost of goods sold and SG&A stable as a percentage of sales.

• dd's DISCOUNTS brand continued strong momentum, contributing solid sales and operating profits.

• Sequential improvement in sales was seen throughout the quarter, with broad-based gains across merchandise and geographies.

• The company opened 19 new stores in Q1 and plans to open about 90 new stores in FY2025.

Financial highlights

• Comparable store sales were flat year-over-year, with total sales up $127 million, mainly from new store openings.

• Cost of goods sold as a percentage of sales was 71.8%, nearly unchanged from last year.

• SG&A expenses increased due to new stores but remained flat as a percentage of sales; net cash from operations rose to $410 million.

• 2 million shares repurchased for $262.5 million in Q1 under a $2.1 billion buyback program.

• The company repaid $700 million in Senior Notes at maturity in April 2025.

Outlook and guidance

• Q2 comparable store sales projected flat to up 3%; total sales forecast to increase 2-6% year-over-year.

• Q2 EPS guidance is $1.40-$1.55, including a $0.11-$0.16 tariff impact; operating margin expected at 10.7-11.4%.

• Merchandise margin and operating margin expected to decrease in Q2 due to tariffs and higher distribution costs.

• Capital expenditures for FY2025 projected at $855 million, funded by available cash.

• Annual guidance withdrawn due to macroeconomic and trade policy uncertainties.