Ross Stores (ROST) Q1 2026 earnings summary

Executive summary

• Q1 FY2025 sales grew 2.6% to $4.99 billion, driven by 78 net new store openings and strong dd's DISCOUNTS performance.

• Net income was $479 million, down from $488 million last year, with diluted EPS of $1.47, up $0.01 due to share repurchases.

• Operating margin held steady at 12.2% of sales, as cost of goods sold and SG&A remained stable as a percentage of sales.

• Sales and earnings performed at the high end of expectations, with broad-based improvement after a slow February.

• 19 new stores opened in Q1, with 90 new stores planned for FY2025.

Financial highlights

• Comparable store sales were flat year-over-year.

• Merchandise margin declined 45 basis points due to higher ocean freight and initial tariff impacts.

• SG&A was flat as a percentage of sales, with increases mainly from new store openings.

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

• Net cash provided by operating activities was $410 million, up from $369 million last year.

Outlook and guidance

• Q2 2025 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 cost impact from tariffs.

• Operating margin for Q2 expected in the 10.7-11.4% range, with a 90-120 basis point negative impact from tariffs.

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

• Annual guidance withdrawn due to macroeconomic and trade policy uncertainties.