The quarter beat both the company’s prior guide and published expectations. Published estimates clustered around roughly $1.93-$2.05 of EPS and $6.12-$6.15 billion of sales. Ross delivered $2.66 diluted EPS and $6.26 billion of sales, while its previous Q2 guide called for $1.85-$1.93 EPS. (Financial Highlights)
| Metric | Q2 FY2026 | Q2 FY2025 / prior expectation | Read |
|---|---|---|---|
| Sales | $6.26B (Financial Highlights) | $5.53B prior year; ~$6.12-$6.15B consensus | Beat |
| Comparable-store sales | +10% (Financial Highlights) | +2% prior year; +6%-7% prior company guide | Beat |
| Diluted EPS | $2.66 (Income Statement) | $1.56 prior year; ~$1.93-$2.05 consensus | Beat |
| Operating margin | 17.6% implied (Financial Highlights) | 11.5% prior year; company planned 12.8%-13.0% | Beat |
| FY2026 EPS outlook | $8.61-$8.77 (Outlook) | $7.50-$7.74 prior company guide | Raised |
The underlying earnings beat is real, but the headline EPS overstates it. About $253 million of operating profit, or roughly $0.60 per share, came from IEEPA tariff refunds. (Financial Highlights; Outlook) Excluding that benefit, EPS was approximately $2.06—still modestly above the upper end of the published estimate range, while sales and the 10% comp were clearly stronger than expected. The core margin improvement was also better than planned: operating margin expanded 205 basis points excluding the refund versus a planned 130-150 basis points. (Financial Highlights)
The bigger surprise is the forward reset, not the quarter alone. Ross raised its full-year EPS range to $8.61-$8.77 from $7.50-$7.74, although the new outlook includes the $0.60 tariff-refund benefit. (Outlook) Even stripping out that benefit, the implied underlying range of roughly $8.01-$8.17 is above the prior guide, signaling that management sees better sales and profitability than it did after Q1.
Traffic-led demand and expansion add credibility to the raise. Comparable sales were driven primarily by customer traffic, and the company increased its 2026 new-store plan to 115 locations from approximately 110 previously. (Outlook) 〔0〕 The main caveat is that the second-half outlook now assumes decelerating comps of 6%-7% in Q3 and 4%-5% in Q4 against tougher comparisons, so the cleanest read is a genuine beat with a meaningful but partly nonrecurring tariff tailwind.
Read the original 8-K on SEC EDGAR ↗