Ross Stores (ROST) Stock Soars 5% on Record-Breaking Q1 Performance

Table of Contents Shares of Ross Stores climbed 5.3% in Friday’s premarket session, trading above $228, following the discount retailer’s exceptional first-quarter performance that exceeded analyst projections on all key metrics. Ross Stores, Inc., ROST Quarterly revenue for the period concluded in early May climbed 21% to $6.01 billion, comfortably beating the $5.64 billion Wall Street forecast. Comparable store sales surged 17% — nearly double the 9.4% analyst projection. CEO Jim Conroy attributed the expansion to widespread strength spanning multiple merchandise segments, customer income brackets, demographic groups, and geographic markets. “We experienced consistent momentum throughout the entire quarter,” Conroy stated. He pointed to customer traffic as the key catalyst, complemented by enhanced marketing initiatives and store experience improvements. The timing of tax refunds provided additional support. According to Conroy, elevated consumer expenditure linked to tax refund distributions contributed positively to the period’s performance. $ROST | Ross Stores Inc., Q1-2027 Earning Report pic.twitter.com/cak9CNc9HX — Hardik Shah (@AIStockSavvy) May 21, 2026 Earnings per share registered at $2.02, climbing 37% from the prior-year figure of $1.47. This result significantly exceeded both the company’s internal projection of $1.60–$1.67 and the $1.73 analyst consensus. Operating margin reached 13.4%, comfortably above Ross’ guidance range of 11.8%–12.1%, propelled primarily by improved merchandise margins and occupancy expense leverage stemming from robust sales volume. Quarterly net income increased to $650 million, compared with $479 million in the corresponding year-ago quarter. All principal merchandise divisions registered comparable sales increases in the teens or higher. Ladies’ apparel and cosmetics emerged as top performers, with Conroy highlighting new brand partnerships and Korean beauty product popularity as contributing factors in the cosmetics segment. The retailer’s dd’s DISCOUNTS banner also demonstrated strong revenue growth spanning all categories and regions. From a geographic standpoint, the Midwest region led performance, though strength was evident nationwide. Conroy noted that customer transactions on a comparable-store basis increased by double digits, with advances across all income segments, ethnic groups, and age demographics — including younger consumers. “Transaction growth has powered our comparable sales performance for three straight quarters,” he emphasized. Regarding expenses, merchandise gross margin expanded by 85 basis points, while occupancy costs improved by 60 basis points due to strong sales leverage. Elevated fuel prices partially offset freight savings, and performance-based compensation increased proportionally with the earnings outperformance. The company concluded the quarter with total inventories up 12%. Packaway inventory represented 36% of total stock, down from 41% in the previous year. Conroy characterized closeout merchandise availability as “exceptional.” Ross concluded Q1 operating 2,282 locations after opening 17 new stores spanning 11 states. The retailer plans to inaugurate approximately 110 new locations during fiscal 2026, representing roughly 5% unit growth. This expansion encompasses around 85 Ross stores and 25 dd’s DISCOUNTS locations, accounting for 10–15 anticipated closures or relocations. For the second quarter, Ross anticipates comparable sales growth of 6%–7% and EPS ranging from $1.85–$1.93, representing a 19%–24% year-over-year increase. Total Q2 revenue is projected to rise 9%–11%. For the complete fiscal 2026 year, Ross elevated its outlook to comparable sales growth of 6%–7% and EPS of $7.50–$7.74, up from $6.61 in the prior year. Conroy highlighted that the quarter represented “the strongest same-store sales performance in the company’s four-decade history.”