Ross Stores Inc. (ROST): FQ26 Earnings Review: Strong momentum continues as strategic initiatives take hold

Research evidence excerpt

Equity Research

20 August 2026 | 7:10PM MDT

Ross Stores Inc. (ROST)

F2Q26 Earnings Review: Strong momentum continues as strategic initiatives take hold

ROST

12m Price Target: $293.00

Price: $228.99

Upside: 28.0%

ROST reported another strong quarter - delivering a 2Q beat and FY

guidance raise, while also providing a better-than-expected 2H

outlook. 2Q comp momentum remained robust at +10% (2-yr stack

still double digit at +12%), outperforming peers and mainstream

retail. Growth was transaction-led and broad-based across

consumer demographics, merchandise categories, and geographies.

Importantly, management called out strengthening momentum

throughout the quarter, with July the strongest month and strength

continuing into August despite increasingly difficult comparisons.

Comp performance was also consistent on a week-to-week basis

(with more limited event-driven volatility), reinforcing our

confidence in the durability of current demand. Beyond top line

growth, 2Q margins also outperformed, with healthy flow-through

of the top line beat after adjusting for one-time tariff refund gains.

Management pointed to several signs of strengthening competitive

positioning. Key customer KPIs are strong - with strong traffic

growth from new customer acquisition, reactivation of lapsed

customers, increased customer frequency, and higher spending

from customers. The company is also delivering strong product

metrics, characterizing the level of closeout availability as

outstanding and driving stronger relationships with vendors (new

vendor accounts, better existing relationships, and access to better

brands).

Looking ahead, management expressed confidence in forward

growth. ROST indicated that many of its initiatives across

merchandising, marketing, and store operations are in the early

innings and will continue to drive market share gains. While the

company was not willing to adjust its long-term algorithm at this

stage, they did raise their 2H comp guidance significantly (3Q

guided 6-7% and 4Q guided 4-5%), and indicated confidence in

growing on top of the very strong comps delivered this year. While

higher fuel costs remain a headwind, ROST more than offset these

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