Ross Stores $ROST reported first-quarter earnings that exceeded its own forecasts by a wide margin on Thursday, as a 17% jump in comparable store sales drove profit well above plan.
Earnings per share came in at $2.02, up 37% from $1.47 in the same period last year and above the company's guidance range of $1.60 to $1.67. Total sales rose 21% to $6.0 billion, up from $5.0 billion a year earlier. The quarterly operating margin reached 13.4%, compared with the company's plan of 11.8% to 12.1%.
Shares jumped roughly 6% in after-hours trading.
CEO Jim Conroy attributed the results to customer traffic. "Customer traffic was the primary driver of the strong sales trend as compelling merchandise assortments, higher customer acquisition and engagement from our ongoing marketing initiatives, and an improved in-store experience are resonating with shoppers," he said in a statement. "We believe our results also benefited from higher consumer spending related to tax refunds."
Broader demographic trends also drew attention on the earnings call, where Conroy noted gains that cut across age, income, and ethnic lines. "We saw a healthy increase in customer count on a comparable-store basis across income levels, ethnicities, and age groups, including younger customers," he said, according to Reuters.
Buoyed by the strong quarter, the company lifted its full-year targets. Fiscal 2026 same-store sales are now expected to increase 6% to 7%, a meaningful step up from the 3% to 4% growth the company had previously guided. On the bottom line, annual earnings per share guidance moved to a range of $7.50 to $7.74, versus the prior outlook of $7.02 to $7.36.
For the second quarter ending Aug. 1, 2026, the company projected comparable store sales growth of 6% to 7% and earnings per share of $1.85 to $1.93, representing growth of 19% to 24% versus $1.56 in the prior-year period.
Ross Stores operates 1,917 Ross Dress for Less locations in 44 states, the District of Columbia, Guam, and Puerto Rico, along with 365 dd's Discounts stores in 23 states. The Dublin, California-based company had fiscal 2025 revenues of $22.8 billion.
During the first quarter, Ross Stores repurchased 1.5 million shares of common stock for $319 million, and remains on track to buy back a total of $1.275 billion in stock during fiscal 2026.