Ross Stores (NASDAQ: ROST) just posted a strong second quarter, helped by shoppers looking for lower prices. In fact, its sales jumped about 13% year over year to $6.3 billion. Comparable-store sales were up by 10%. A big reason for the growth was higher customer traffic. More people are visiting Ross stores and buying merchandise, showing that the company’s value-focused approach continues to appeal to shoppers.
Ross also reported a large increase in profits.
The company earned $2.66 per share during the quarter. That was well above its previous forecast of $1.85 to $1.93 per share. Net income rose to about $851 million, compared with $508 million during the same quarter last year.
However, there was an important reason for part of that increase. Ross received about $253 million in refunds related to tariffs. The refunds added roughly 60 cents to earnings per share.
That means the tariff refund gave profits a significant one-time boost. Even without that benefit, however, the company had a strong quarter. Sales and customer traffic were both up, while the company’s operating performance improved.
Ross Raised Its Forecast
After the strong results, Ross Stores raised its expectations for the rest of the year. The company now expects to earn between $8.61 and $8.77 per share for fiscal 2026. Its previous forecast was between $7.50 and $7.74.
Ross also expects sales at existing stores to continue growing during the second half of the year. The company expects comparable-store sales to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter. Those forecasts suggest that management believes shoppers will continue looking for bargains.
Ross is also planning to expand. The company now expects to open 115 new stores in 2026, up from its previous goal of 110. Opening more stores gives Ross another way to increase sales and reach new customers.
The company believes there is still plenty of room to grow its store base. The expansion also shows that Ross is confident about the long-term demand for its discount shopping model.
Why Shoppers Are Choosing Ross
Ross’ results come at a time when many consumers are paying close attention to prices. Higher costs for everyday expenses have made shoppers more interested in discounts. Instead of paying full price, customers may be willing to shop at stores such as Ross to find lower prices on clothing, home products and other merchandise.
Ross also benefits from the excitement of finding something unexpected at a discount. The company’s stores regularly change their selection, which can encourage customers to visit more often. The latest results suggest that strategy is working.
The Outlook
Ross Stores’ second-quarter results were strong, but investors should keep one thing in mind: the tariff refund helped boost profits.
That benefit is not expected to happen every quarter. The more important question is whether Ross can continue attracting customers and increasing sales without that extra boost. So far, the signs are positive. Customer traffic is growing, sales are increasing and the company is raising its expectations for the year.
For shoppers looking for bargains, Ross appears to be in a good position. And for investors, the company’s latest results suggest that its discount-focused business model remains strong even as consumers continue to watch their spending closely.
What’s Next?
Strong sales, higher customer traffic and improved earnings helped the company deliver a better-than-expected quarter and raise its full-year outlook.
The tariff refund provided a meaningful boost to profits, but the underlying results were still encouraging. If Ross can maintain customer traffic, grow sales and successfully expand its store base, the company could continue benefiting from consumers’ preference for affordable merchandise. For now, Ross appears well positioned to remain a strong player in the discount retail market.
