How much of the quarter's earnings growth came from one-time tariff refunds?

About $253 million of IEEPA tariff refunds was recognized in Q2, contributing roughly $0.60 per diluted share out of the $2.66 total. Excluding this benefit, EPS would have been about $2.06, still well above the prior guidance range of $1.85 to $1.93, and up meaningfully from $1.56 a year earlier.

What does the updated guidance imply for the second half of fiscal 2026?

Management guided Q3 comparable store sales growth of 6% to 7% and Q4 growth of 4% to 5%, with EPS of $1.75 to $1.83 and $2.17 to $2.26, respectively. Management acknowledged tougher year-over-year comparisons in the back half, so comp growth is expected to slow from Q2's 10%, though the outlook was raised.

Is Ross continuing to return capital to shareholders?

Yes. The company repurchased 1.4 million shares for $319 million in Q2 and remains on track to buy back $1.275 billion of stock in fiscal 2026 under its $2.55 billion two-year authorization approved in March 2026. Dividends paid were $286 million in the first six months.

Are there any concerns in the balance sheet or cash flow?

Inventory grew about 18% year over year to $3.09 billion, faster than the 13% sales increase, which could pressure margins if markdowns become necessary. On the positive side, debt declined to about $1.02 billion from $1.52 billion, cash rose to $4.29 billion, and operating cash flow for the first half was $1.71 billion, up from $1.08 billion.

What is the store expansion plan?

Ross opened 47 stores in Q2 and raised its 2026 new store opening plan to 115 locations, consisting of approximately 90 Ross Dress for Less and 25 dd's DISCOUNTS stores. The company ended the quarter with 2,328 stores in total, up from 2,233 a year earlier.

ROST 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 20, 2026. Cited figures are marked; the original filing is the authoritative source.

Ross Stores (ROST) reported strong second-quarter fiscal 2026 results for the 13-week period ended August 1, 2026.

Sales rose 13% to $6.26 billion^a, driven by a 10% comparable store sales increase that management attributed primarily to customer traffic. Net income nearly doubled... actually rose 68% to $851 million, and diluted EPS was $2.66 versus $1.56 a year earlier. However, roughly $253 million of IEEPA tariff refunds (about $0.60 per share) inflated both operating income and EPS.

Excluding this one-time benefit, operating margin still expanded by about 205 basis points, ahead of the company's 130 to 150 basis point plan, which indicates real underlying improvement, though the headline margin gain of 610 basis points overstates the recurring trend. Management raised its second-half and full-year outlook. Third-quarter comparable store sales are now guided to 6% to 7% and fourth-quarter to 4% to 5%, with EPS ranges of $1.75 to $1.83^b and $2.17 to $2.26, respectively.

Full-year fiscal 2026 EPS guidance was raised to $8.61 to $8.77^c, including the tariff refund benefit. Management also increased its 2026 new store plan to 115 locations (about 90 Ross and 25 dd's DISCOUNTS) and reaffirmed roughly $1.275 billion of share repurchases for fiscal 2026. Management described the back half as facing significantly tougher year-over-year comparisons, so the guidance implies deceleration in comp growth from Q2's 10%.

The balance sheet remains strong. Cash and equivalents were $4.29 billion^d, total debt fell to about $1.02 billion from $1.52 billion a year earlier after $500 million of repayments, and stockholders' equity rose to $6.74 billion.

Merchandise inventory grew about 18% year over year, faster than sales growth of 13%, which is a metric investors should monitor against future markdown risk. The filing is furnished under Item 2.02 and is not deemed filed for Exchange Act purposes.

02—Key points

Key Highlights

Q2 sales rose 13% to $6.26 billion; comparable store sales grew 10% (vs. 2% last year), primarily on customer traffic.
Q2 diluted EPS was $2.66 vs. $1.56 a year ago, including about $0.60 per share from $253 million of IEEPA tariff refunds, well above the prior guidance of $1.85 to $1.93.
Operating margin rose 610 bps to roughly 17.6%; excluding the tariff refund (405 bps), the underlying expansion was about 205 bps, ahead of the 130 to 150 bps plan.
Fiscal 2026 EPS guidance raised to $8.61 to $8.77 (including the ~$0.60 refund benefit); Q3 comp guidance is 6% to 7% and Q4 is 4% to 5%.
Store growth accelerated: 47 openings in Q2 (35 Ross, 12 dd's), with the 2026 plan raised to 115 new stores; total store count reached 2,328.
Capital returns continue: $319 million of repurchases in Q2 and a targeted $1.275 billion for fiscal 2026 under the $2.55 billion two-year authorization.
Balance sheet strengthened: $500 million of debt repaid in the first half, total debt reduced to about $1.02 billion, and cash of $4.29 billion; inventory rose about 18% vs. sales growth of 13%.

03—Questions

Frequently Asked Questions

How much of the quarter's earnings growth came from one-time tariff refunds?
About $253 million of IEEPA tariff refunds was recognized in Q2, contributing roughly $0.60 per diluted share out of the $2.66 total. Excluding this benefit, EPS would have been about $2.06, still well above the prior guidance range of $1.85 to $1.93, and up meaningfully from $1.56 a year earlier.
What does the updated guidance imply for the second half of fiscal 2026?
Management guided Q3 comparable store sales growth of 6% to 7% and Q4 growth of 4% to 5%, with EPS of $1.75 to $1.83 and $2.17 to $2.26, respectively. Management acknowledged tougher year-over-year comparisons in the back half, so comp growth is expected to slow from Q2's 10%, though the outlook was raised.
Is Ross continuing to return capital to shareholders?
Yes. The company repurchased 1.4 million shares for $319 million in Q2 and remains on track to buy back $1.275 billion of stock in fiscal 2026 under its $2.55 billion two-year authorization approved in March 2026. Dividends paid were $286 million in the first six months.
Are there any concerns in the balance sheet or cash flow?
Inventory grew about 18% year over year to $3.09 billion, faster than the 13% sales increase, which could pressure margins if markdowns become necessary. On the positive side, debt declined to about $1.02 billion from $1.52 billion, cash rose to $4.29 billion, and operating cash flow for the first half was $1.71 billion, up from $1.08 billion.
What is the store expansion plan?
Ross opened 47 stores in Q2 and raised its 2026 new store opening plan to 115 locations, consisting of approximately 90 Ross Dress for Less and 25 dd's DISCOUNTS stores. The company ended the quarter with 2,328 stores in total, up from 2,233 a year earlier.

04—Continue

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