Here's How Ross Stores Stock is Poised Ahead of Q2 Earnings

Ross Stores, Inc. ROST is likely to post year-over-year top and bottom-line growth when it reports second-quarter fiscal 2026 earnings on Aug. 20, after market close. The Zacks Consensus Estimate for quarterly revenues is pegged at $6.1 billion, indicating a rise of 10.7% from the year-ago quarter’s figure.

The consensus estimate for earnings is pegged at $1.92 per share, up 23.1% from the year-earlier period. The consensus mark has risen a penny in the past seven days.

ROST has a trailing four-quarter earnings surprise of 10.2%, on average. In the last reported quarter, the company posted an earnings surprise of 18.8%.

Key Factors Likely to Influence ROST’s Q2 Results

Ross Stores’ second-quarter fiscal 2026 performance is expected to have been supported by broad-based strength across its merchandise categories, fueled by solid customer response at the banners. Its ability to consistently deliver value-driven bargains continues to resonate with price-conscious consumers amid a cautious discretionary spending backdrop. Consistent execution of store expansion plans is also expected to have supported top-line growth.

Ross Stores is focused on strengthening its off-price business by offering customers compelling value, expanding its store network and improving merchandise execution. The company is working to broaden its merchandise assortments, offer more recognizable brands and improve the speed and timing of product flow. Backed by its proven business model, Ross Stores is poised to have generated increased traffic, stronger same-store sales and improved profitability for the quarter under review. 

On the last reported quarter’s earnings call, the company had forecast comparable-store sales (comps) to increase 6-7% and earnings per share of $1.85-$1.93, with operating margin guided to 12.8-13% for second-quarter fiscal 2026. Second-quarter fiscal 2026 guidance assumes merchandise margin improvement and lower distribution costs as the company celebrates the opening of a new Arizona distribution center. Our model anticipates operating margin to rise 12.8% and earnings per share of $1.86 for the second quarter.

However, Ross Stores remains cautious about ongoing macroeconomic and geopolitical uncertainties, persistent inflation and their impact on consumer spending. The company also continues to face tariff-related headwinds, as evolving trade policies and elevated duties put pressure on its cost structure. Changes in ticketing, processing and import costs driven by tariffs are likely to have increased volatility in cost of goods sold and limited earnings.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Ross Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Ross Stores currently has an Earnings ESP of +4.03% and a Zacks Rank of 3.

ROST’s Price Performance & Valuation Picture

From a valuation perspective, Ross Stores has a forward 12-month price-to-earnings of 30.48X, slightly lower than the Retail-Discount Stores industry’s average of 31.13X. The stock is also trading slightly below its high level of 31.38X.

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The recent market movements show that ROST’s shares have gained 26.8% in the past six months compared with the industry's 0.5% growth.

More Stocks With the Favorable Combination

Here are three more companies, which according to our model, have the right combination of elements to post an earnings beat this season:

The TJX Companies TJX currently has an Earnings ESP of +1.31% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is likely to register growth in the bottom and top lines when it reports second-quarter fiscal 2026 results. The consensus mark for TJX’s quarterly revenues is pegged at $15.1 billion, which indicates a 5.1% rise from the figure reported in the prior-year quarter.

The consensus mark for TJX’s quarterly earnings has moved up a penny in the past 30 days to $1.18 per share. The consensus estimate indicates growth of 7.3% from the year-ago quarter’s actual. TJX has a trailing four-quarter earnings surprise of 8.8%, on average.

Williams-Sonoma, Inc. WSM has an Earnings ESP of +3.05% and a Zacks Rank of 3. WSM is likely to register a top and bottom-line increase when it reports second-quarter fiscal 2026 numbers.

The Zacks Consensus Estimate for quarterly earnings per share of $2.05 suggests an increase of 2.5% from the year-ago fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $1.9 billion, suggesting growth of 4.1% from the prior-year fiscal quarter’s reported figure. WSM has a trailing four-quarter earnings surprise of 7.2%, on average.

Designer Brands Inc. DBI currently has an Earnings ESP of +0.03% and a Zacks Rank of 3. The company is expected to register a top-line increase when it reports second-quarter fiscal 2026 results. 

The consensus mark for revenues is pegged at $743 million, indicating a rise of 0.4% from the figure reported in the year-ago quarter. The Zacks Consensus Estimate for quarterly earnings per share of 25 cents suggests a drop of 26.5% from the year-ago quarter. DBI has a trailing four-quarter earnings surprise of 112.8%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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