An off-price retailer, Ross Stores runs two brands that sell brand-name apparel and home fashions at big discounts. Ross Dress for Less targets middle-income shoppers, while dd's DISCOUNTS serves lower-to-moderate-income customers, both offering a "treasure hunt" of close-out finds. The company began in 1950 when Morris "Morrie" Ross opened a small department store in San Bruno, California, named after himself; in 1982 a group of investors bought those six stores and reinvented them as the off-price chain known today.
Q1 FY2026 comparable store sales rose 17% as revenue climbed 20.6% to $6.01B
rose 17% after a year of fading growth. rose 20.6% to $6,010.5M and rose 37.4% to $2.02 as traffic and basket gains lifted 1.5 points to 29.6%. The off-price retailer returned to broad-based growth with debt down and a new program in place.
Key takeaways
rose 17% (11% traffic, 6% basket), the strongest comp reading since the post-pandemic recovery began, driving up 20.6% to $6,010.5M versus $4,985.0M a year earlier and down 9.4% from the Q4 holiday quarter.
rose 1.5 points to 29.6% as cost of goods sold fell 145 to 70.4% of sales, primarily from an 85-basis-point merchandise margin improvement and .
rose 32.6% to $804.0M and expanded 1.2 points to 13.4%, while rose 37.4% to $2.02 aided by a lower and share repurchases.
Section summaries
Management's Discussion and Analysis
Q1 FY2026 sales rose 21% to $6.01B, driven by 17% comp growth, with operating margin expanding 120 bps to 13.4%.
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Total sales increased 21% to $6,010 million, with up 17% on an 11% traffic gain and 6% basket increase.
rose 104.0% to $836.0M from $409.7M a year earlier, driven by higher earnings and ; the company repaid $500M of .
fell 23.6% to $776.8M and the company plans about 110 new stores and $1.1B in for fiscal 2026, funded by available cash.
What changed
FY2025 flagged FY2026 against 11.9%: it expanded to 13.4% on merchandise margin improvement and , against management's expectation of slight improvement.
FY2025 flagged FY2026 comp sales against the 5% gain: Q1 comps rose 17%, far above the full-year pace as the Q3 FY2025 rebound held and accelerated.
Packaway was not reported this quarter or at FY2025 year-end; the last disclosed level was 41% at FY2024 year-end.
Pace of deployment: the new $2.55B program through January 2028 replaced the prior $2.1B program after $1.05B was used in FY2025; Q1 used repurchases to lower the share count but disclosed no dollar amount.
Q1 FY2025 had flagged Q2 margin decline from tariffs and Buckeye center costs; those pressures did not appear in Q1 FY2026 as merchandise margin improved 85 instead.
What to watch
Q2 FY2026 against the 17% Q1 gain to see if the rebound holds or fades
Q2 FY2026 against 29.6% as tariff and Buckeye distribution costs may reappear
Dollar amount deployed under the $2.55B program in Q2 after no Q1 figure was disclosed
Packaway percentage at FY2026 year-end against the 41% FY2024 level
Cost of goods sold as a percent of sales fell 145 to 70.4%, primarily from an 85 bps improvement and occupancy .
SG&A as a percent of sales rose 25 to 16.2%, mainly due to higher incentive compensation expense.
grew 33% to $804 million, and rose 37% to $2.02, aided by a lower and share repurchases.
nearly doubled to $836 million, driven by higher earnings and , while the company repaid $500 million of Senior Notes.
The company plans to open about 110 new stores in fiscal 2026 and expects $1.1 billion in , funded by available cash.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, which primarily include changes in interest rates. We do not engage in financial transactions for trading or speculative purposes. Interest that is payable on our Credit Facility is based on variable interest rates and is therefore affected by cha…
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We are exposed to market risks, which primarily include changes in interest rates. We do not engage in financial transactions for trading or speculative purposes.
Interest that is payable on our Credit Facility is based on variable interest rates and is therefore affected by changes in market interest rates. As of May 2, 2026, we had no borrowings outstanding under the Credit Facility.
As of May 2, 2026, we had outstanding four series of unsecured Senior Notes. Interest that is payable on all series of our Senior Notes is based on fixed interest rates, and is therefore unaffected by changes in market interest rates.
We receive interest payments on our cash and cash equivalents and restricted cash and cash equivalents. Changes in interest rates may impact the interest income we recognize in the future.
A hypothetical 100 basis point increase or decrease in prevailing market interest rates would not have a material negative impact on our financial position, results of operations, cash flows, or the fair values of our cash and cash equivalents and restricted cash and cash equivalents as of and for the three month period ended May 2, 2026. We do not consider the potential losses in future earnings and cash flows from reasonably possible, near-term changes in interest rates to be material.
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The matters under the caption “Commitments and contingencies” in Note A: Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements are incorporated herein by reference.
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The matters under the caption “Commitments and contingencies” in Note A: Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements are incorporated herein by reference.
See Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 for a description of risks and uncertainties associated with our business.
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See Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 for a description of risks and uncertainties associated with our business.