Ross Stores Inc. rallied more than 8% in early U.S. premarket trading on Thursday after reporting a 13% increase in second-quarter sales and raising its full-year earnings outlook.
The off-price retailer posted second-quarter revenue of $6.3 billion, up from $5.58 billion a year earlier, driven by a 10% rise in comparable-store sales. Net income climbed to $851.3 million from $508 million in the same period last year, while diluted earnings per share rose to $2.66 from $1.56. Operating income increased to $1.1 billion, and operating margins expanded by 205 basis points excluding tariff benefits.
The company included approximately $253 million in tariff refunds under the International Emergency Economic Powers Act, which added about 60 cents to earnings per share. For the first six months of fiscal 2026, sales rose 17% to $12.3 billion, with comparable-store sales up 13% and net income reaching $1.5 billion.
Ross Stores also accelerated its share repurchase program, buying back 1.4 million shares for $319 million during the quarter. The company remains on track to repurchase $1.275 billion of stock in fiscal 2026.
Management raised its full-year earnings-per-share guidance to $8.61-$8.77, including the benefit from tariff refunds. Comparable-store sales are projected to rise 6%-7% in the third quarter, with earnings per share forecast at $1.75-$1.83. For the fourth quarter, comparable sales are expected to increase 4%-5%, with earnings projected at $2.17-$2.26.
The retailer plans to open 115 new locations in fiscal 2026, including 90 Ross Dress for Less stores and 25 dd's Discounts locations. During the second quarter, 47 stores were opened.
Jefferies raised its price target on Ross Stores to $285 from $265, citing the company's strong performance and growth outlook.
