Home and beauty products led Ross Stores to strong second-quarter gains, prompting the company to raise its financial guidance.
Net income was $851.3 million, or $2.66 per diluted share, versus $508 million, or $1.56 per diluted share, in the prior-year quarter, the company reported. The earnings per diluted share result included 60 cents attributable to IEEPA tariff refunds.
An analyst consensus estimate emerging from Zacks Investment Research called for earnings per diluted share of $1.93 and revenues of $6.13 billion.
Comparable sales jumped 10% in the quarter as net sales increased 13% to $6.26 billion year over year. Operating income was $1.1 billion versus $638.3 million in the year-previous period. Second-quarter operating profit includes $253 million from the IEEPA tariff refund, Ross noted.
In a conference call, Jim Conroy, Ross CEO, said home, including the decorative and housewares segments, enjoyed above-average sales growth in an overall solid quarter.
“The strong performance at Ross was broad-based across both merchandise categories and geographies,” Conroy said. “In the second quarter, home and cosmetics were our strongest businesses. By geography, we saw strength across all markets, with the Midwest performing the best. dd’s Discounts also delivered solid sales and saw similar broad-based performance across merchandise areas and geographic regions.”
In announcing the financial results, Conroy said, “We achieved stellar sales and earnings growth in the second quarter. Our performance was fueled by our compelling merchandise offerings, engaging marketing initiatives and continued enhancements to the in-store experience. We were pleased to see strength throughout the quarter, with comparable store sales growth once again primarily driven by customer traffic. Importantly, that growth was supported by both an increase in new customers and higher engagement from existing customers. These trends reinforce our belief that the actions we are taking are not only driving the current business performance but that we can continue to build on our early successes.”
Regarding Ross’ revised outlook, Conroy said: “Based on our strong first half results and our updated second half guidance, we are increasing our 2026 fiscal year earnings per share projections to be in the range of $8.61 to $8.77, which again includes an approximate 60 cents earnings per share benefit from IEEPA tariff refunds recognized in the second quarter. From a store growth perspective, we remain encouraged by the success of our expansion strategy across both new and existing markets. As a result, we are increasing our 2026 new store opening plan to 115 locations, consisting of approximately 90 Ross Dress for Less and 25 dd’s Discounts stores.”
As it announced first-quarter results in May, Ross raised full-year guidance to include a 6% to 7% year-over-year comp gain, with earnings per share in the range of $7.50 to $7.74.
As the company moved into the second half of the year, Conroy said, Ross is building momentum, and the company is “excited for the plans we have in place entering the fall season. Despite facing significantly more challenging year-over-year comparisons in the back half, we are raising our outlook for both the third and fourth quarters. Comparable store sales are now expected to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter. If the second half of 2026 performs in line with these sales projections, our earnings per share ranges for the third and fourth quarters are projected to be $1.75 to $1.83 and $2.17 to $2.26, respectively.”
The company opened 47 new stores during the second quarter, it maintained, including 35 Ross Dress for Less and 12 dd’s Discounts locations. In all, Ross operates 1,952 namesake stores in 44 states, the District of Columbia, Guam and Puerto Rico, as well as 376 dd’s Discounts locations in 23 states.
