Ross Stores, Inc. Q1 2026 Earnings Recap

Ross Stores traded up 7.8% after reporting a significant comp sales beat and strong margin expansion in the first quarter. The market responded positively to robust top-line growth driven by transaction increases and better-than-expected operating leverage.

Key Takeaways

• First quarter total sales rose 21% to $6.0 billion, driven by a 17% comp increase primarily from higher customer transactions.
• Operating margin expanded 120 basis points to 13.4%, aided by a 145 basis point reduction in cost of goods sold and leverage in occupancy costs.
• Earnings per share increased 37% to $2.02, supported by both sales growth and margin improvements.
• Inventories were up 12%, with packaway inventory as a lower percentage than last year, indicating improved stock composition.
• Management raised full-year sales and earnings guidance following strong Q1 results and anticipates steady comp growth of 6%-7% with continued margin gains.