Ross Stores Jumps After Strong Quarter and Higher Full-Year Profit Forecast

Ross Stores shares surged Friday after the off-price retailer delivered stronger-than-expected second-quarter results and raised its profit outlook for the full year. Shares of ROST climbed nearly 9% in premarket trading as investors responded to robust sales growth and continued demand from consumers seeking lower-priced merchandise.

Second-quarter revenue increased approximately 13% from a year earlier to $6.26 billion. Comparable-store sales rose 10%, significantly exceeding expectations and demonstrating broad strength across the retailer's customer base. The company reported earnings of $2.66 per share, while adjusted earnings were $2.06 per share, ahead of analysts' projections.

The quarter benefited from approximately $253 million in tariff-related refunds. Even after accounting for that unusual benefit, the company's underlying results showed substantial improvement as customer traffic and spending strengthened.

Management said sales gains were broad-based across geographic regions and merchandise categories. Home products and cosmetics were among the particularly strong areas, while the company also experienced healthy demand in the Midwest. Customers increased spending across multiple categories rather than concentrating purchases in only a few areas.

Ross appears to be benefiting from consumers' continued emphasis on value. Economic uncertainty and higher household expenses have encouraged many shoppers to seek discounted apparel, accessories and household merchandise. The off-price business model also gives the retailer flexibility to purchase excess merchandise from suppliers and offer recognizable brands at reduced prices.

Following the strong quarter, Ross raised its fiscal 2026 earnings forecast to between $8.61 and $8.77 per share, substantially above its previous projection of $7.50 to $7.74. The company also expects comparable-store sales to increase between 6% and 7% during the third quarter and between 4% and 5% in the fourth quarter.

The stronger outlook suggests management expects consumer demand to remain healthy through the second half of the year. It also distinguishes Ross from some competing retailers that have recently reported signs of slower spending or weaker performance in particular merchandise categories.

Investors have also responded positively to improvements in the company's merchandise selection and store experience. Efforts to expand the availability of popular brands, improve product assortments and update stores appear to be helping Ross attract both existing customers and new shoppers.

The retailer is continuing to expand its physical footprint as well. Ross now plans to open approximately 115 stores during the year, slightly above its earlier target of 110 locations, signaling confidence in the longer-term opportunity for off-price retailing.

For investors in ROST, the latest results provide evidence that the company is gaining momentum despite an uncertain consumer environment. The key question for the remainder of 2026 will be whether Ross can maintain its unusually strong comparable-sales growth while converting increased customer traffic into sustainable earnings gains.