Oversold, Ross Stores (NASDAQ: ROST) just posted a strong second quarter, helped by shoppers looking for lower prices. In fact, its sales jumped about 13% year over year to $6.3 billion. Comparable-store sales were up by 10%. A big reason for the growth was higher customer traffic. More people are visiting Ross stores and buying merchandise, showing that the company’s value-focused approach continues to appeal to shoppers.

Ross also reported a large increase in profits.

The company earned $2.66 per share during the quarter. That was well above its previous forecast of $1.85 to $1.93 per share. Net income rose to about $851 million, compared with $508 million during the same quarter last year.

However, there was an important reason for part of that increase. Ross received about $253 million in refunds related to tariffs. The refunds added roughly 60 cents to earnings per share.

That means the tariff refund gave profits a significant one-time boost. Even without that benefit, however, the company had a strong quarter. Sales and customer traffic were both up, while the company’s operating performance improved.

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Ross Raised Its Forecast

After the strong results, Ross Stores raised its expectations for the rest of the year. The company now expects to earn between $8.61 and $8.77 per share for fiscal 2026. Its previous forecast was between $7.50 and $7.74.

Ross also expects sales at existing stores to continue growing during the second half of the year. The company expects comparable-store sales to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter. Those forecasts suggest that management believes shoppers will continue looking for bargains.

Ross is also planning to expand. The company now expects to open 115 new stores in 2026, up from its previous goal of 110. Opening more stores gives Ross another way to increase sales and reach new customers. 

The company believes there is still plenty of room to grow its store base. The expansion also shows that Ross is confident about the long-term demand for its discount shopping model.

Why Shoppers Are Choosing Ross

Ross’ results come at a time when many consumers are paying close attention to prices. Higher costs for everyday expenses have made shoppers more interested in discounts. Instead of paying full price, customers may be willing to shop at stores such as Ross to find lower prices on clothing, home products and other merchandise.

Sincerely,

Ian Cooper