Ross Stores delivered a robust second quarter, with management attributing the performance to a surge in customer traffic and broad-based merchandise strength. CEO James Conroy noted that sales momentum improved each month, highlighting that "customer traffic once again served as a primary driver of our comparable store sales increase." The company reported gains from both new and returning shoppers, with a wider range of age groups and income segments engaging with the brand. Merchandising teams expanded vendor relationships and assortment breadth, while the store organization successfully enhanced the in-store experience, leading to higher transaction counts and deeper engagement across the store base.
Is now the time to buy ROST? Find out in our full research report (it’s free for active Edge members).
Ross Stores (ROST) Q2 CY2026 Highlights:
- Revenue: $6.26 billion vs analyst estimates of $6.15 billion (13.3% year-on-year growth, 1.8% beat)
- EPS (GAAP): $2.66 vs analyst estimates of $1.95 (37% beat)
- EPS (GAAP) guidance for the full year is $8.69 at the midpoint, beating analyst estimates by 10.8%
- Operating Margin: 17.6%, up from 11.5% in the same quarter last year
- Locations: 2,328 at quarter end, up from 2,233 in the same quarter last year
- Same-Store Sales rose 10% year on year (2% in the same quarter last year)
- Market Capitalization: $77.37 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ross Stores’s Q2 Earnings Call
- Matthew Robert Boss (JPMorgan): Asked how Ross Stores will sustain top-line momentum despite tougher comparisons. CEO James Conroy described strong underlying customer metrics and early-stage initiatives, indicating confidence in further growth opportunities.
- Lorraine Hutchinson (Bank of America): Questioned which ongoing initiatives have the most potential for future comp strength. Conroy referenced merchandising, store operations, and marketing efforts that remain only partially implemented across the chain.
- Michael Charles Binetti (Evercore ISI): Inquired if the business could maintain above-average comp growth or would return to historical 3–4% levels. Group President Michael Hartshorn stated it is too early to update the long-term algorithm, as many initiatives are still scaling.
- Ike Boruchow (Wells Fargo): Focused on margin trends and the impact of higher freight costs in the second half. Hartshorn explained that merchandise margin and distribution center efficiencies are expected to help, but rising fuel costs will remain a headwind.
- Marni Shapiro (Retail Tracker): Asked about marketing’s effect on attracting younger consumers and potential increases in marketing spend. Conroy confirmed younger customer acquisition is strong, with marketing spend planned to rise proportionally with sales.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will watch (1) whether customer traffic and new customer acquisition remain strong as marketing efforts evolve, (2) the ability of new store openings—especially in new geographic markets—to drive incremental growth, and (3) how effectively Ross Stores manages margin headwinds from freight and fuel costs. Continued vendor partnership expansion and merchandise innovation will also be important markers of progress.
Ross Stores currently trades at $234.14, up from $228.99 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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