Ross Stores 2026 Q3 Earnings Beats Expectations with 4.7% Net Income Growth

Ross Stores (ROST) reported fiscal 2026 Q3 earnings on Nov 20, 2025, exceeding revenue and EPS estimates while raising full-year guidance. The company’s stock rose 3% post-earnings as strong demand for discount goods and disciplined cost management bolstered investor confidence ahead of the holiday season.

Revenue

The total revenue of Ross Stores increased by 10.4% to $5.60 billion in 2026 Q3, up from $5.07 billion in 2025 Q3. This outperformance was driven by a 7% rise in comparable store sales, fueled by robust back-to-school demand and effective merchandising strategies.

Earnings/Net Income

Ross Stores's EPS rose 6.7% to $1.59 in 2026 Q3 from $1.49 in 2025 Q3, with net income climbing 4.7% to $511.94 million. The EPS increase and net income growth highlight the company’s strong performance despite a $0.05 EPS headwind from tariffs.

Post-Earnings Price Action Review

The strategy of buying Ross Stores when it beats revenue expectations and holding for 30 days has shown favorable performance. Recent Q3 results, marked by 10.4% year-on-year revenue growth and GAAP EPS 10.9% above estimates, triggered positive market sentiment. Analysts’ slightly conservative EPS estimates suggest optimism about future performance, while strong fundamentals and technical indicators support short-term price resilience. However, this backtest analysis does not guarantee future outcomes.

CEO Commentary

CEO James Conroy attributed the 10% total sales growth to “compelling brand name values” and successful back-to-school sales, while emphasizing efforts to mitigate tariff impacts through inventory optimization and closeout opportunities. He expressed confidence in holiday positioning and market share gains.

Guidance

CFO William Sheehan provided Q4 2026 guidance: 3-4% comp sales growth, EPS of $1.77-$1.85 (full-year EPS $6.38-$6.46), and revenue up 6-8%. Tariff impacts are expected to be negligible in Q4, with full-year costs at $0.16 EPS.

Additional News

1. Dividend Announcement: Ross declared a $0.405/share quarterly dividend, aligning with previous payouts and yielding 1.01%.

2. Share Repurchases: The company repurchased $262 million in shares during Q3, advancing its $2.1 billion buyback program.

3. Store Expansion: Ross opened 40 new stores (36 Ross and 4 dd’s DISCOUNTS) in Q3, completing its 2025 expansion plan and ending the year with 2,273 locations.

Financial Health

Ross Stores maintains a robust balance sheet with a current ratio of 1.58 and a debt-to-equity ratio of 0.88. Despite a slight operating margin decline to 11.6% due to tariffs, the company’s profitability remains strong, supported by a 9.6% net margin. Institutional ownership at 90.15% underscores investor confidence, though insider selling activity and slowing revenue growth warrant caution.