Ross Stores, Inc.

Strong top-line momentum (and what drove it): - Q2 comparable store sales +10% (2nd straight quarter of double-digit comps). - Growth driven primarily by higher transaction count / customer traffic (customers visiting more often and spending more). - Customer capture improved with new and re-lapsed customers, plus more frequent trips from existing customers. New customer cohorts were broad across income/age demographics, suggesting durable brand relevance rather than a narrow segment.

Earnings surge powered by margin leverage + tariff refunds: - Total sales +13% to $6.3B. - Operating margin +610 bps in Q2, but the call emphasized a large tailwind: ~405 bps of tariff refunds included in Q2 operating margin. - Net income $851M vs $558M prior year; EPS $2.66 vs $1.56. - Management also cited underlying profitability drivers: merchandise margin +110 bps, distribution costs -100 bps, occupancy cost leverage +25 bps, partly offset by buying cost deleverage (-5 bps) and freight cost headwind (+10 bps).

Guidance raised for the back half of 2026 (key forecasts): - Q3 comp +6% to +7%; Q3 EPS $1.75–$1.83 (vs $1.58 last year). - Q3 total sales +9% to +11%; operating margin planned 11.7%–12.0% (vs 11.6% last year), aided by comp leverage and slightly higher merchandise margins, offset by higher freight/fuel assumptions. - Q4 comp +4% to +5% (vs +9% last year); Q4 EPS $2.17–$2.26 (vs $2.00 same period 2025). - Full-year 2026 EPS forecast: $8.61–$8.77 (vs $6.61 last year). - Tariff refunds included in guidance: about $0.60 EPS for the year (same concept reiterated as embedded in Q1/Q2 too).