DUBLIN, California, August 21, 2026, 17:03 PDT — Ross Stores (ROST) shares jumped after the discount retailer added $3.2 billion in value, with a tariff refund accounting for 56% of the company’s upward revision to its earnings outlook.
- Shares of Ross Stores rose 4.39% to $239.04, increasing its market capitalization by roughly $3.2 billion.
- Comparable sales increased 10%, primarily due to higher customer traffic.
- The midpoint rise in full-year EPS guidance is 56% attributable to a tariff refund.
Ross Stores, Inc. NASDAQ:ROST gained around $3.2 billion in market value on Friday. Shares ended up 4.39% at $239.04 following a 13% rise in second-quarter net sales and a 10% increase in comparable sales. U.S. markets have closed for the weekend.
Investors are focusing on earnings quality. A tariff refund of $253 million boosted quarterly earnings per share by roughly $0.60. This same impact accounts for 56% of the midpoint rise in Ross’s full-year EPS guidance.
The underlying performance remained robust. Without the refund, the quarterly EPS reached approximately $2.06, a 32% increase from $1.56 in the same period last year. Operating margin, excluding the refund, rose by 205 basis points, surpassing the company’s projected increase of 130 to 150 basis points.
| Q2 measure | Reported | Underlying or prior-year comparison |
|---|---|---|
| Total sales | $6.3bn | Up 13% from a year ago |
| Comparable sales | +10% | Rose 2% in the prior year |
| Operating profit | $1.1bn | Figure includes $253m refund |
| Operating-margin change | +610 bps | Up 205 bps without refund |
| EPS | $2.66 | $2.06 without refund; $1.56 a year ago |
| Net income | $851m | $508m in the previous year |
Chief Executive Jim Conroy said Ross posted “stellar sales and earnings growth.” The increase was fueled by new customers, the return of former shoppers, and frequent visits from current customers. Traffic continued to be the leading driver of comparable sales. Ross Stores Q2 release
Management increased its full-year EPS forecast to $8.61-$8.77, up from a prior range of $7.50-$7.74. The midpoint climbed by $1.07. Excluding the $0.60 refund, the revised midpoint stands at roughly $8.09, which is still 6.2% higher than the previous midpoint.
| Outlook measure | Old view or consensus | New company view |
|---|---|---|
| Fiscal 2026 EPS | $7.50-$7.74 | $8.61-$8.77 |
| FY26 EPS excluding refund | $7.62 old midpoint | Roughly $8.09 midpoint |
| Q3 comparable sales | +3.1% analyst view | Between +6% and +7% |
| Q4 comparable sales | +2.6% analyst view | Between +4% and +5% |
| 2026 store openings | 110 | 115 |
The sales guide provides additional details compared to the refund. Ross’s third-quarter midpoint surpasses the LSEG analyst estimate by 3.4 percentage points, while its fourth-quarter midpoint is higher by 1.9 points.
Shares rose on Friday but gains were restrained. The stock touched an intraday peak of $243.86 before settling 2.0% lower. Trading volume totaled 5.69 million shares, nearly 1.9 times the three-month average.
Ross posted stronger growth than the recent update from TJX Companies NYSE:TJX. Reuters highlighted weaker momentum at TJ Maxx and Marshalls during the same period. The difference backs Ross’s assertion that its product selection, marketing strategies and store operations are driving market share gains.
| Analyst recommendation | New target | Change on Aug. 21 |
|---|---|---|
| Deutsche Bank — Buy | $294 | Up from $283 |
| Evercore ISI — Outperform | $290 | Up from $276 |
| Jefferies — Buy | $285 | Confirmed |
| Telsey Advisory — Outperform | $280 | Up from $265 |
| Morgan Stanley — Equal Weight | $234 | Up from $231 |
Wall Street maintains a positive outlook. Consensus from 20 analysts rates the stock as Buy, with a mean price target of $269.94, representing a potential 12.9% gain from Friday’s closing price. However, Morgan Stanley’s price target of $234 is lower than the current market level.
| Market and capital metric | Value | Investor read-through |
|---|---|---|
| Friday close | $239.04 | Up 4.39% |
| Market value | $76.68bn | Roughly $3.2bn gained on Friday |
| Trailing P/E | 27.7x | High valuation needs sustained growth |
| Consensus target | $269.94 | Implied upside of 12.9% |
| FY26 planned buyback | $1.275bn | 1.7% of total market value |
Ross bought back $319 million in shares over the quarter. The scheduled buyback for the fiscal year totals $1.275 billion, representing about 1.7% of Friday’s market capitalization. While this boosts per-share metrics, overall operating performance is still the key factor.
Investors are set to monitor post-earnings target revisions and back-to-school foot traffic next week. Inventory increased by 18%, with packaway inventory now at 36% of the total versus 38% previously. Robust inventory turnover would back the updated sales guidance for the second half.
Risks: The benefit from the tariff refund will not repeat, and more challenging comparisons start in the second half. Increased costs for fuel, freight, or products may weigh on value-focused customers and margins. Surplus inventory could increase the likelihood of markdowns.
