Executive Summary

Q1 FY2026 delivered high-end performance: sales $4.98B (+2.6% YoY), flat comps, diluted EPS $1.47; operating margin 12.2% flat YoY .
Beat Street on EPS and revenue: EPS $1.47 vs $1.449 consensus; revenue $4.98B vs $4.956B consensus; 14 EPS and 17 revenue estimates contributed to consensus* [Values retrieved from S&P Global].
Management issued Q2 EPS guidance of $1.40–$1.55 and withdrew full-year guidance amid tariff uncertainty, highlighting $0.11–$0.16 per-share tariff impact for Q2 .
Stock reaction catalyst: withdrawal of FY guidance due to elevated tariffs; shares fell on the announcement .

What Went Well and What Went Wrong

Sales and earnings at the high end of expectations; operating margin 12.2% flat YoY, reflecting disciplined expense control despite macro headwinds .
Sequential monthly sales improvement after a slow February; management: “our monthly sales performance improved sharply, month after month, for the balance of the quarter” — CEO Jim Conroy .
Continued capital returns: repurchased 2.0M shares for $263M in Q1; on track for $1.05B repurchases in FY2025 .

FY guidance withdrawn due to tariff uncertainty; management cited heightened macroeconomic and evolving trade policies as unpredictable, creating visibility challenges .
Tariff headwind pressure persists into Q2 with an anticipated $0.11–$0.16 per-share cost impact in guidance, constraining near-term profitability .
Q/Q decline from holiday quarter: Q4 FY2025 revenue $5.91B and EPS $1.79 vs Q1 FY2026 $4.98B and $1.47 as seasonal normalization and tariffs weighed .

Metric	Q4 2025	Q1 2026	Q2 2026
Revenue ($USD Billions)	$5.912	$4.9849	$5.529
Diluted EPS ($USD)	$1.79	$1.47	$1.56
Net Income ($USD Millions)	$586.8	$479.2	$508.0
Operating Income ($USD Millions)	$731.0	$606.5	$638.3
Operating Margin (%)	12.4%	12.2%	11.5%

Estimate vs Actual (Q1 2026):

Metric	Consensus	Actual	Surprise
EPS ($USD)	$1.44906*	$1.47	+$0.02094*
Revenue ($USD Billions)	$4.9565*	$4.9849	+$0.0284*
EPS - # of Estimates	14*	—	—
Revenue - # of Estimates	17*	—	—

Notes: Values marked with * retrieved from S&P Global.

KPIs and Operating Metrics:

KPI	Q4 2025	Q1 2026	Q2 2026
Comparable Store Sales	+3% YoY	Flat YoY	+2% YoY
Store Count (End of Period)	2,186	2,205	2,233
Share Repurchases	—	2.0M; $263M	1.9M; $262M
Tariff Impact (EPS)	—	—	~-$0.11 per share in Q2

Segment Breakdown: Not disclosed (Ross does not report segment revenues in press releases) .

Metric	Period	Previous Guidance	Current Guidance	Change
EPS	Q2 FY2026	—	$1.40–$1.55; includes ~$0.11–$0.16 tariff impact	Initiated
EPS	FY2025	$5.95–$6.55 (given Mar 4)	Withdrawn at Q1 due to tariffs	Lowered (withdrawn)
Comps	Q3 & Q4 FY2025	—	+2% to +3% each (provided at Q2)	Initiated (2H update)
Dividends	Q1 FY2026	Declared $0.405 per share for 6/30/2025	Continued regular dividend program	Maintained

Topic	Previous Mentions (Q4 2025)	Previous Mentions (Q2 2026)	Current Period (Q1 2026)	Trend
Tariffs/Macro Uncertainty	Cautious FY2025 planning; price/value focus	EPS drag ~$0.11; OM -95bps; price strategy to mitigate	Withdrawal of annual guidance; Q2 EPS includes $0.11–$0.16 tariff impact	Tariff headwinds intensifying; visibility reduced
Sales Trend	Holiday strength; comps +3%	Sequential improvement; strong July/back-to-school	Slow February, then month-over-month improvement; flat comps	Improving intra-quarter momentum
Inventory/Buying	Packaway facility sale (benefit to EPS)	Inventory up 5%; vendor negotiations, more closeouts	Opportunistic inventory posture; conservative planning	Active inventory management continues
Store Growth	FY2024 end: 2,186 stores	Q2: Opened 31 locations; store count 2,233	Q1: 16 Ross and 3 dd’s stores opened; end-period 2,205	Consistent multi-banner expansion
Shareholder Returns	Announced 10% dividend hike; buybacks planned	$262M buybacks; $1.05B FY target	$263M buybacks; $1.05B FY target	Ongoing, consistent capital return

“Despite the slower start to the spring selling season in February, our monthly sales performance improved sharply, month after month, for the balance of the quarter.” — CEO Jim Conroy, Q1 press release .
“Heightened macroeconomic and geopolitical uncertainty persists, most notably prolonged inflation and evolving trade policies.” — Q1 press release .
“We will focus on what we can control and manage the business conservatively… flexible off-price model… strong financial foundation.” — Q1 press release .
“We were pleased to see the improved trend at the end of the [Q2] quarter… earnings modestly exceeded the high end of our guidance range, mainly due to lower-than-expected tariff-related costs.” — Q2 press release .
“We are not planning to be the first to raise prices” — pricing strategy to mitigate tariff impacts, Q2 call highlight .

Tariff strategy: Management emphasized negotiating with vendors and increasing closeout merchandise to offset tariff costs; unwilling to lead price increases .
Near-term visibility: Withdrawal of FY guidance reflects unpredictability in trade/tariff outcomes; clarified Q2 EPS range and tariff impact .
Sales cadence: Q1 saw a slow start in February followed by monthly improvement; Q2 ended with strong July/back-to-school momentum .
Capital allocation: Reaffirmed buyback pace and regular dividend program; reiterated $1.05B buyback target for FY2025 .

Q1 FY2026 beats vs S&P Global consensus: EPS $1.47 vs $1.44906; revenue $4.9849B vs $4.9565B; 14 EPS and 17 revenue estimates contributed to consensus*.
Q4 FY2025: EPS $1.65 actual vs $1.656 consensus; revenue $5.912B actual vs $5.951B consensus* — mixed print leading into Q1 normalization*.
Q2 FY2026: EPS $1.56 actual vs $1.538 consensus; revenue $5.529B actual vs $5.541B consensus*; beat on EPS, slight revenue miss*.
Notes: Values marked with * retrieved from S&P Global.

Q1 FY2026 was resilient: high-end performance with flat comps and stable 12.2% margin, supporting the off-price defensiveness despite macro/tariff headwinds .
The critical narrative is tariffs: FY guidance withdrawal elevates uncertainty; expect near-term estimate volatility, particularly on margin assumptions and EPS ranges .
Street-adjusted models should embed tariff EPS drag ($0.11–$0.16 in Q2; similar framework in 2H), with pricing and closeout mix as partial mitigants .
Intra-quarter sales momentum matters: watch monthly cadence and back-to-school holiday read-through; management cited sharp improvement post-February and strong July .
Store growth remains a tailwind with multi-banner expansion; focus on new store productivity and regional performance as catalysts .
Capital returns are consistent: $1.05B buyback plan and regular dividends provide downside support; monitor authorization progress vs cash generation .
Trading implication: headline risk around tariffs and guidance can drive near-term volatility; positive comp turns and evidence of tariff cost mitigation could re-rate margins and estimates.

Additional Q1-related press releases:

S&P Global disclaimer: All consensus estimate figures and counts marked with * are sourced from S&P Global Capital IQ.