Ross Stores Inc (ROST) Q1 2026 Earnings Call Transcript
Bullish Grocery Stores 65.16B USA
Next Earnings
2026-05-20
There is no Profile data available for RSO.DU.
Ross Stores delivered a strong Q4 with double-digit sales growth, solid comp gains, and raised 2026 store openings and earnings guidance while expanding capital returns.
⭐ Key Highlights
Q4 sales and comps
Q4 total sales rose 12% to $6.6 billion with comparable store sales up 9%, driven by transactions and broad-based strength across departments.
Full-year performance
Fiscal 2025 revenue rose 8% to a record $22.8 billion, with full-year EPS of $6.61 (up from $6.32), and currency/tariff-related effects largely managed within expectations.
Store expansion and milestones
Year-end store count reached 2,267 (Ross 1,904; dd’s 363) and the company plans 110 new stores in 2026 (85 Ross, 25 dd’s), with entry into New York Metro and Puerto Rico.
Profitability and margins
Q4 margin was 12.3% vs 12.4% prior year (excluding a 105 bp packaway benefit last year, margin up ~95 bp); COGS and occupancy leveraged, while SG&A rose due to packaway sale accountability.
Guidance and capital returns
2026 guidance expects 7%–8% quarterly comps in Q1, full-year EPS $7.02–$7.36, sales +5%–7%, margin 12.0%–12.3%, with capex around $1.1 billion and a refreshed buyback/dividend plan.
✔Positive Signals
- Q4 comp growth of 9% driven by transactions and broad category strength
- Strong full-year revenue and earnings growth with margin discipline
- Upbeat 2026 guidance including 7%–8% Q1 comps and $7.02–$7.36 annual EPS
- Accelerating store openings and geographic expansion (New York Metro, Puerto Rico)
- Increased capital return via new buyback authorization and higher dividend
✖Negative Signals
- First-quarter headwinds from DC cost unwind and timing of packaway expenses
- Higher incentive compensation and logistics costs impacting near-term margins
- Tariff-related costs previously discussed; risk of tariff environment persists
- Some pressure from weather-related comp erosion previously observed
📊Financial Results
- Q4 total sales $6.6 billion, up 12% YoY; Q4 net income $646 million; EPS $2.00
- Full-year 2025 sales $22.8 billion, up 8%; net income $2.1 billion; EPS $6.61
- Q4 operating margin 12.3% (vs 12.4% prior year, excluding 105 bp packaway benefit); gross margin and occupancy leverage contributed to margin strength
- Share repurchase: completed $2.1 billion program; new $2.55 billion plan approved for 2026–2027; 10% dividend increase
- 2026 guidance implies margin expansion to 12.0%–12.3% and capital expenditures of about $1.1 billion
🔮Future Guidance
- Q1 FY2026 guidance: comps +7% to +8%, EPS $1.60–$1.67, total sales +10%–12%, operating margin 11.8%–12.1%
- Full-year FY2026 guidance: comps +3%–4%, EPS $7.02–$7.36, total sales +5%–7%, operating margin 12.0%–12.3%, capex ~$1.1 billion, 110 new stores (85 Ross, 25 dd’s), and 25 dd’s stores in 2026
- Capital allocation: continued stock buybacks (~$2.55 billion authorization) and higher dividend (~10% increase) to return cash while funding growth
💡Interesting Insights
- dd’s DISCOUNTS reacceleration step: planned 25 stores in 2026 suggests a meaningful density push similar to Ross, supported by a Rite Aid bankruptcy-driven pipeline; indicates a broader omnichannel-like expansion approach within off-price channels.
Detailed Analysis
AI-generated summary of Ross Stores Inc earnings call transcript.
Ross Stores reported robust Q4 results with 12% sales growth and 9% comps across all regions and categories, supported by improved merchandise mix, marketing, and in-store execution. Full-year revenue rose 8% to a record $22.8 billion, with EPS of $6.61, and ongoing buyback plus a higher dividend reflecting confidence in growth. The company plans to accelerate store openings in 2026 to about 110 new locations (85 Ross and 25 dd’s), including expansion into the New York Metro area and Puerto Rico, and anticipates continued margin expansion led by better product buying, tariff recapture, and efficiency gains. Management highlighted broad-based strength across Ladies, cosmetics, shoes, and home, coupled with improving new-store productivity in higher-density markets. For 2026, Ross guided to 7%–8% comps in Q1 and full-year EPS of $7.02–$7.36, with total sales up 5%–7% and a 12%–12.3% operating margin, supported by capex of roughly $1.1 billion and ongoing store/productivity investments.
Get Real-Time Earnings Call Alerts for Ross Stores Inc
Create a free MarketAlerts account to add ROST to your watchlist and receive instant AI-powered alerts when new earnings call transcripts, insider trades, and technical signals are detected.
Other MarketAlerts Features
