Ross Stores, Inc.

First-quarter total sales increased 21% to $6.0 billion. Comparable store sales grew 17%, driven primarily by transaction growth. Operating margin was 13.4%, up 120 basis points from 12.2% last year. Net income was $650 million versus $479 million a year ago, and EPS rose 37% to $2.02 from $1.47. Inventory was up 12% and packaway represented 36% of total inventory versus 41% last year. For Q2 2026, management guided to comp sales up 6% to 7%, total sales up 9% to 11%, operating margin of 12.8% to 13.0%, and EPS of $1.85 to $1.93. For fiscal 2026, comp sales are now expected to rise 6% to 7% on top of last year’s 5% gain, and EPS is projected at $7.50 to $7.74, up 13% to 17% versus $6.61 last year.

Jim Conroy framed the quarter as evidence that Ross is early in a broader transformation in merchandising, marketing, and stores. He emphasized that customer growth is broad-based across income levels, ages, and geographies, with the younger customer responding particularly well. His tone was upbeat and confident, but he repeatedly stressed that many initiatives are still early-stage and that management sees more room to run.

Bill Sheehan detailed the financial upside: sales up 21% to $6.0 billion, margin up to 13.4%, and EPS of $2.02. He broke out the margin lift as merchandise margin up 85 bps, occupancy leverage of 60 bps, and lower distribution and freight costs, partly offset by higher buying costs and SG&A tied to incentives. He also noted $319 million of share repurchases in the quarter, 1.5 million shares bought back, and reiterated the plan to repurchase $1.275 billion of stock in 2026. On guidance, he said Q2 assumes elevated fuel prices pressuring freight costs, and tariff refunds were excluded from outlook because timing and amounts remain uncertain.

Analysts focused on whether the 17% comp was durable, how much came from new customer acquisition versus existing customer frequency, and whether inventory and chase capability can support continued growth. Management said transaction growth was primarily driven by new customers, customer count was up double digits, and the company is still seeing strong availability of closeouts and first calls from vendors. Questions also centered on SG&A leverage, freight headwinds, and store productivity; management said incentives drove the first-quarter SG&A deleverage, freight costs may remain pressured by fuel, and new stores are outperforming prior underwriting with 70% to 75% of mature-store productivity as the current guide, though they hope to beat that.