Ross Stores Shares Dip 0.50 as $820M Trading Volume Ranks 77th Amid Mixed Earnings and Margin Pressures

Ross Stores (ROST) closed on August 21, 2025, with a 0.50% decline, trading a volume of $820 million, ranking 77th in market activity. The stock’s performance followed mixed earnings updates and strategic updates impacting long-term growth prospects.

The company reported Q2 2025 revenue of $5.53 billion, a 4.6% year-over-year increase, aligning with Wall Street estimates. GAAP earnings per share (EPS) of $1.56 exceeded analyst forecasts by 1.4%, driven by strong adjusted EBITDA of $808.6 million. However, operating margin contracted 95 basis points to 11.5%, pressured by a 90-basis-point hit from elevated tariff costs. Management attributed the margin compression to ongoing trade challenges, including higher-than-anticipated tariff pass-throughs and distribution costs.

Ross expanded its physical footprint, opening 28 new Ross stores and three dd’s Discount locations, bringing total locations to 2,233. The company also initiated a store modernization program, targeting half of its chain for refreshes in 2025. Same-store sales grew 2% year-over-year, though below the 4% pace seen in the prior-year period. CEO Jim Conroy emphasized diversifying sourcing strategies and optimizing pricing to mitigate tariff impacts, while highlighting early momentum in back-to-school sales and category-specific outperformance in cosmetics and women’s apparel.

For fiscal 2025, Ross reiterated guidance for full-year EPS between $6.08 and $6.21, factoring in a $0.22–$0.25 per share tariff impact. The company also announced $1.05 billion in planned share repurchases. Despite margin headwinds, analysts remain cautiously optimistic, noting Ross’s disciplined expansion and proactive cost mitigation. However, the stock’s recent underperformance reflects market concerns over the sustainability of growth amid macroeconomic uncertainties and sector-wide margin pressures.

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