Ross Stores Expands 2026 Store Plan After Strong Q2

Ross Stores, Inc. (Nasdaq: ROST) announced an expansion of its store development plans for 2026, increasing the projected number of new locations to 115, up from a previous target of 110. This strategic move follows a robust second quarter performance, which saw the California-based off-price retail chain's stock price rise approximately 8%. The company reported a 13% year-over-year increase in quarterly sales, reaching $6.26 billion. This growth was further bolstered by a 10% year-over-year rise in same-store sales, an indicator the company attributes to increased customer traffic. During the reporting period, Ross Stores opened 47 new locations, contributing to its ongoing expansion efforts. The company also revised its full-year earnings per share (EPS) forecast upward, projecting it to be between $8.61 and $8.77, a significant increase from the prior forecast of $7.50 to $7.74. This enhanced EPS outlook includes a 60-cent per share boost derived from government tariff refunds. Ross Stores disclosed it received $253 million in tariff refunds, aligning with a trend seen among other major retailers like Target and Walmart. These refunds stem from a February Supreme Court decision that deemed President Trump's "Liberation Day" tariffs unlawful. The substantial tariff refund contributed significantly to the company's operating profits for the quarter, which surged to $1.1 billion, a marked improvement from $638.27 million in the same quarter of the previous year. In contrast to Walmart's stated intention to reinvest refunds into "price investments," Ross CEO Jim Conroy indicated a different approach. Conroy explained during a post-earnings call that Ross had largely absorbed the impact of tariffs over the past year, rather than passing the costs directly to consumers. He suggested that many other retailers adopted a strategy of passing on tariff costs and are now reversing that course, while Ross aimed to maintain greater price stability for its customers. Conroy noted that while the company might implement "modest" price increases throughout the year, these would likely remain at current levels, reflecting a commitment to competitive pricing. Even prior to the recent stock surge, Ross Stores' share price had already experienced an increase of over 8% year-to-date, underscoring investor confidence in the company's operational strategy and financial performance. The company's focus on expanding its physical footprint while managing costs and maintaining competitive pricing positions it for continued growth in the off-price retail sector.