Ross Stores 2026 Q1 Earnings Slight Revenue Increase Amid Net Income Decline

Ross Stores (ROST) reported its fiscal 2026 Q1 earnings on Jun 11th, 2025. The company's total revenue rose by 2.6% to $4.98 billion, surpassing last year's Q1 revenue of $4.86 billion. However, despite the revenue growth, the company experienced a decline in net income, which fell by 1.8% to $479.25 million from $487.99 million in the previous year. The earnings per share (EPS) increased slightly by 0.7% to $1.48 compared to $1.47 in 2025 Q1. The company's guidance for the next quarter projects flat to slightly positive comparable store sales growth, with EPS expected to be between $1.40 to $1.55, reflecting the impact of tariffs.

Revenue

Ross Stores generated $4.98 billion in revenue for Q1 2026. The Home Accents and Bed and Bath segment reported $1.30 billion, while the Ladies segment contributed $1.15 billion. The Accessories, Lingerie, Fine Jewelry, and Cosmetics segment brought in $747.75 million, followed by the Men’s segment at $697.90 million. Shoes accounted for $648.05 million, and Children’s added $448.65 million, culminating in the total revenue figure.

Earnings/Net Income

Ross Stores's EPS rose 0.7% to $1.48 in 2026 Q1, indicating stable earnings growth. However, the net income declined by 1.8% to $479.25 million, suggesting mixed financial performance this quarter.

Post-Earnings Price Action Review

Following the earnings report, Ross Stores' stock performance strategy of buying after a revenue miss and holding for 30 days resulted in a 53.68% return, falling short of the benchmark return of 88.76%. This strategy demonstrated a Sharpe ratio of 0.28, reflecting poor risk-adjusted returns, with a maximum drawdown of -45.57% and a volatility of 32.78%. The data underscores the challenges faced in achieving favorable post-earnings price action, highlighting the stock's susceptibility to broader market influences and the importance of strategic planning in navigating such environments.

CEO Commentary

Jim Conroy, Chief Executive Officer, emphasized that despite a slower start to the spring season, monthly sales improved significantly throughout the quarter. He noted that earnings and sales performed at the high end of expectations, maintaining an operating margin of 12.2%. Conroy pointed out the ongoing macroeconomic and geopolitical uncertainties, particularly prolonged inflation and trade policy fluctuations, which could impact profitability. He underscored the company's commitment to managing the business conservatively and leveraging a seasoned executive team and a flexible business model to navigate this unpredictable environment.

Guidance

For the 13 weeks ending August 2, 2025, Ross Stores projects comparable store sales to be flat to up 3%, alongside an earnings per share forecast in the range of $1.40 to $1.55, down from $1.59 in the prior year. This guidance reflects an anticipated cost impact of approximately $0.11 to $0.16 per share from tariffs. The company has withdrawn its annual sales and earnings guidance due to the volatility of trade policies and their potential effects on profitability.

Additional News

In recent developments, Ross Stores announced the opening of 19 new locations in March 2025 as part of its expansion strategy for the year. This includes 16 new Ross Dress for Less locations and three dd's DISCOUNTS stores across 14 states. The expansion is in line with the company's plan to open approximately 90 new locations by the end of 2025, enhancing its footprint across the United States. Additionally, the company declared a regular quarterly cash dividend of $0.405 per common share, payable on June 30, 2025, to stockholders of record as of June 10, 2025. This decision reflects Ross Stores' commitment to returning capital to its shareholders amidst its ongoing expansion efforts.