Financial Data and Key Metrics Changes - Total sales for the second quarter grew 5% to $5.5 billion, up from $5.3 billion last year, with comparable store sales increasing by 2% [7] - Earnings per share for the second quarter were $1.56 on net income of $508 million, compared to $1.59 per share on net earnings of $527 million in the prior year [7][8] - Operating margin decreased by 95 basis points to 11.5%, primarily due to tariff-related costs [6][14] Business Line Data and Key Metrics Changes - Cosmetics was the best-performing merchandise area in the second quarter, with strong performance in the ladies' business, which outperformed the chain average [8][29] - Overall comparable store sales at BB's Discounts were solid and ahead of Ross, with both chains experiencing growth in traffic and basket size [9] Market Data and Key Metrics Changes - The strongest markets were the Southeast and the Midwest, with a broad-based improvement in sales trends across nearly all major merchandise categories and regions [5][8] - Total consolidated inventories and average store inventories were up 5% compared to last year, with packaway merchandise comprising 38% of total inventories [9] Company Strategy and Development Direction - The company plans to open approximately 90 new locations this year, including 80 Ross and 10 DD's Discount stores, reflecting expansion into new and existing markets [10] - The company is focused on maintaining its value proposition relative to traditional retailers while balancing the opportunity to preserve merchandise margin [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the sales outlook for the second half of the year, anticipating comparable store sales growth of 2% to 3% [16][33] - The company expects to offset most of the impact of tariffs, although modest pressure is anticipated in the third quarter [12][17] Other Important Information - The company repurchased 1.9 million shares of common stock for an aggregate cost of $262 million, remaining on track to buy back a total of $1.05 billion in stock for the year [15] - Management acknowledged the retirement of CFO Adam Orvos and emphasized the importance of a smooth transition [21] Q&A Session Summary Question: Can you elaborate on the sequential top line improvement and the sharp rebound in July? - Management noted broad-based sequential improvement across nearly every merchandise category, with strong performance in July, particularly in cosmetics and ladies' business [28][29] Question: What are the gross margin drivers for the third and fourth quarters? - Management indicated that tariff costs would continue to impact gross margins, but they expect the pressure to be slightly lower than in the second quarter [31] Question: How is the customer responding to price increases? - Management stated that there has been a very modest change in prices, with a cautious approach to raising prices while monitoring competitors [38][39] Question: What initiatives are being implemented to improve store operations? - Management highlighted store refreshes, self-checkout pilots, and new marketing campaigns as key initiatives to enhance customer experience and drive sales [44][49] Question: Are there any changes in consumer demographics or trade down activity? - Management reported no significant changes in income cohorts but noted strong performance in stores with a high concentration of Hispanic customers [65][66] Question: What actions are being taken to mitigate tariff impacts? - Management emphasized efforts in vendor negotiations, diversifying sourcing, and increasing closeout merchandise to mitigate tariff impacts [71][72]

Financial Data and Key Metrics Changes - Total sales for the second quarter grew 5% to $5.5 billion, up from $5.3 billion last year, with comparable store sales up 2% [5] - Earnings per share for the second quarter were $1.56 on net income of $508 million, compared to $1.59 per share on net earnings of $527 million in the prior year [5] - Operating margin decreased 95 basis points to 11.5%, primarily due to tariff-related costs [12] Business Line Data and Key Metrics Changes - Cosmetics was the best-performing merchandise area in the second quarter [6] - The ladies' business showed positive comp growth, outperforming the chain average [26] - Overall comparable store sales at BB's Discounts were solid and ahead of Ross, with growth in both traffic and basket size [7] Market Data and Key Metrics Changes - The strongest markets were the Southeast and the Midwest [6] - New store openings included 28 new Ross locations and three dd's Discount locations, with a total of approximately 90 new locations planned for the year [8] Company Strategy and Development Direction - The company is focused on maintaining its value proposition relative to traditional retailers while balancing the opportunity to preserve merchandise margin [10] - The strategy includes expanding the portion of the business driven by closeouts to mitigate tariff impacts [9] - The company plans to open approximately 90 new locations this year, with a focus on new and existing markets [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the sales outlook for the remainder of the year, with comparable store sales growth projected at 2% to 3% for the third and fourth quarters [14] - The company anticipates modest pressure from tariffs in the third quarter, which is expected to be mitigated in the fourth quarter [10] - Management noted that pricing across the retail industry is beginning to rise, and they are focused on delivering high-quality branded merchandise at compelling price points [10] Other Important Information - The company repurchased 1.9 million shares of common stock for an aggregate cost of $262 million, remaining on track to buy back a total of $1.05 billion in stock for the year [13] - Management acknowledged the retirement of CFO Adam Orvis and expressed gratitude for his contributions [19] Q&A Session Summary Question: Can you elaborate on the sequential top line improvement and the rebound in July? - Management noted broad-based sequential improvement across nearly all merchandise categories, with strong performance in July, particularly in cosmetics and ladies' business [25][26] Question: What are the gross margin drivers for the third and fourth quarters? - Management indicated that tariff costs would continue to impact gross margins, but they expect the pressure to be slightly lower than in Q2 [29] Question: How is the customer responding to price increases? - Management stated that there has been a very modest change in prices, and they will be cautious about significant changes in average unit retail (AUR) [35] Question: What initiatives are being implemented to improve store operations? - Management highlighted store refreshes, self-checkout pilots, and new marketing campaigns as key initiatives to enhance customer experience and drive sales [41][46] Question: Are there any changes in consumer demographics or trade down activity? - Management reported no significant changes in income cohorts but noted a strong response from stores with high concentrations of Hispanic customers [60] Question: What actions are being taken to mitigate tariff impacts? - Management emphasized efforts in vendor negotiations, diversifying sourcing, and increasing closeout merchandise to offset tariff pressures [66][68] Question: What is the outlook for new store openings and associated costs? - Management expressed optimism about new store openings, particularly in Puerto Rico and the New York Metro area, with strong customer responses [98]

Core Insights - Ross Stores reported second-quarter earnings of $1.56 per share, exceeding the analyst estimate of $1.53 per share [1] - The company experienced a negative impact of approximately $0.11 per share due to tariff-related costs [1] - Quarterly revenue reached $5.52 billion, which was below the Street estimate of $5.57 billion but an increase from $5.28 billion in the same quarter last year [1] Management Commentary - The CEO of Ross Stores expressed optimism about the business tone in the second quarter and indicated a cautious approach for the remainder of the year due to macroeconomic uncertainties [2] Future Outlook - For the third quarter, Ross Stores anticipates GAAP EPS between $1.31 and $1.37, lower than the analyst estimate of $1.49 [3] - The company projects fourth-quarter GAAP EPS in the range of $1.74 to $1.81, slightly above the analyst estimate of $1.71 [3] - Ross Stores' stock price increased by 2.23% to $148.87 in extended trading on Thursday [3]

[Ross Stores, Inc. Second Quarter 2025 Earnings Release](index=1&type=section&id=Ross%20Stores%2C%20Inc.%20Second%20Quarter%202025%20Earnings%20Release) [Second Quarter and First Half 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%20and%20First%20Half%202025%20Financial%20Performance) Ross Stores saw **Q2 sales rise 5% to $5.5 billion** with **2% comparable store sales growth**, but EPS declined due to tariffs Second Quarter 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $5.5 billion | $5.3 billion | +5% | | Comparable Store Sales | +2% | N/A | N/A | | Net Income | $508 million | $527 million | -3.6% | | Diluted EPS | $1.56 | $1.59 | -1.9% | - The second quarter earnings included an approximate **$0.11 per share negative impact** from tariff-related costs[5](index=5&type=chunk) First Half 2025 Financial Performance | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Sales | $10.5 billion | $10.1 billion | +4.0% | | Comparable Store Sales | +1% | N/A | N/A | | Net Income | $987 million | $1.0 billion | -1.3% | | Diluted EPS | $3.03 | $3.05 | -0.7% | [Management Commentary and Business Outlook](index=1&type=section&id=Management%20Commentary%20and%20Business%20Outlook) Management noted improving sales trends, Q2 earnings exceeded guidance due to lower tariffs, but operating margin declined to **11.5%** - Sales trends improved sequentially from Q1, with strong performance in May, a softening in June, and a sharp rebound in July, boosted by early back-to-school sales[7](index=7&type=chunk) - Q2 earnings modestly exceeded guidance, mainly because tariff-related costs were lower than expected[7](index=7&type=chunk) - Operating margin for Q2 decreased by **95 basis points to 11.5%** year-over-year, primarily due to the impact of tariff-related costs[7](index=7&type=chunk) - The company anticipates that persistent macroeconomic uncertainty and rising retail prices will lead consumers to seek more value, positioning Ross Stores to potentially capture market share by focusing on its value proposition[9](index=9&type=chunk) [Shareholder Payouts](index=2&type=section&id=Shareholder%20Payouts) Ross Stores repurchased **$262 million** in shares in Q2 2025, targeting **$1.05 billion** in fiscal 2025 buybacks - In Q2 2025, the company repurchased **1.9 million shares** for an aggregate price of **$262 million**[8](index=8&type=chunk) - The company remains on track to buy back a total of **$1.05 billion** in common stock during fiscal 2025, as part of a two-year, **$2.1 billion** program approved in March 2024[8](index=8&type=chunk) [Fiscal 2025 Guidance](index=2&type=section&id=Fiscal%202025%20Guidance) Ross Stores forecasts full-year EPS of **$6.08-$6.21**, including a **$0.22-$0.25 negative tariff impact**, with **2-3% comparable store sales growth** for Q3/Q4 Fiscal 2025 Guidance Summary | Period | Comparable Store Sales Growth | Diluted EPS Range | Prior Year EPS | | :--- | :--- | :--- | :--- | | Q3 2025 | +2% to +3% | $1.31 to $1.37 | $1.48 | | Q4 2025 | +2% to +3% | $1.74 to $1.81 | $1.79 | | Full Year 2025 | N/A | $6.08 to $6.21 | $6.32 | - The guidance includes an estimated negative impact from tariffs of **$0.07 to $0.08 per share** in Q3 and **$0.04 to $0.06 per share** in Q4[9](index=9&type=chunk) - For the full fiscal year 2025, the total anticipated negative impact from announced trade policies is approximately **$0.22 to $0.25 per share**[9](index=9&type=chunk) - The company noted that fiscal 2024 results included a one-time benefit of approximately **$0.14 per share** from the sale of a packaway facility, which affects the year-over-year comparison[9](index=9&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Financial statements show slight Q2/H1 net earnings declines, decreased total assets/cash, and a net cash decrease from debt repayment [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) Q2 2025 sales rose to **$5.53 billion**, but operating income fell to **$638.3 million**, and net earnings decreased to **$508.0 million** Condensed Consolidated Statements of Earnings (Three Months Ended) | ($ in thousands) | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | | :--- | :--- | :--- | | Sales | $5,529,152 | $5,287,519 | | Operating income | $638,274 | $659,233 | | Net earnings | $507,995 | $527,148 | | Diluted EPS | $1.56 | $1.59 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of August 2, 2025, total assets decreased to **$14.50 billion**, cash to **$3.85 billion**, while stockholders' equity grew to **$5.73 billion** Condensed Consolidated Balance Sheets (As of) | ($ in thousands) | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $3,847,016 | $4,668,137 | | Merchandise inventory | $2,608,485 | $2,490,558 | | Total assets | $14,495,519 | $14,678,021 | | Total current liabilities | $4,392,008 | $4,874,240 | | Total liabilities | $8,762,950 | $9,547,489 | | Stockholders' Equity | $5,732,569 | $5,130,532 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 net cash from operations increased to **$1.08 billion**, but financing activities used **$1.55 billion** due to debt repayment, resulting in an **$883 million net cash decrease** Condensed Consolidated Statements of Cash Flows (Six Months Ended) | ($ in thousands) | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,078,077 | $961,042 | | Net cash used in investing activities | ($409,105) | ($333,735) | | Net cash used in financing activities | ($1,552,141) | ($830,040) | | Net decrease in cash | ($883,169) | ($202,733) |

Core Insights - Ross Stores, Inc. (ROST) is anticipated to show revenue growth in its second-quarter fiscal 2025 results, with earnings per share (EPS) estimated at $1.52, reflecting a 4.4% decrease from $1.59 in the same period last year [1] - The revenue consensus estimate stands at $5.53 billion, indicating a 4.7% increase from the previous year's quarter [1] Earnings Performance - ROST has a trailing four-quarter earnings surprise average of 6.1%, with a 2.8% surprise in the last reported quarter [2] - The company has an Earnings ESP of +0.49% and a Zacks Rank of 3, suggesting a favorable outlook for an earnings beat [3] Factors Influencing Q2 Results - Strong growth across merchandise categories and positive customer responses are expected to bolster ROST's performance [4] - The off-price retail model and micro-merchandising strategy are likely to attract value-focused shoppers and optimize inventory allocation [5] - Comparable sales trends have been favorable, with expectations of flat to 3% growth in comps for Q2 [6] Store Expansion and Market Conditions - Consistent execution of store expansion plans is anticipated to contribute to top-line growth [7] - The company is cautious about macroeconomic uncertainties and inflation impacting consumer spending [7] Tariff and Cost Pressures - ROST faces renewed tariff headwinds due to evolving trade policies and elevated duties on goods sourced from China, which could pressure its cost structure [8] - The company expects Q2 revenues of $5.53 billion, with EPS guidance of $1.40-$1.55, reflecting a year-over-year decline primarily due to tariff-related costs [9][11] Margin Compression and Guidance - ROST is preparing for short-term margin compression, with anticipated impacts from tariffs and inflation limiting pricing flexibility [10][11] - The company has withdrawn its fiscal 2025 sales and earnings guidance due to uncertainties [10] Valuation and Stock Performance - ROST is trading at a forward 12-month price-to-earnings ratio of 22.53X, lower than the industry average of 32.67 [12] - The stock has declined by 4.7% over the past three months, compared to a 2.7% decline in the industry [14]

Core Insights - Ross Stores (ROST) is expected to report quarterly earnings of $1.52 per share, a decline of 4.4% year-over-year, with revenues projected at $5.53 billion, reflecting a 4.6% increase compared to the previous year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [1] Earnings Estimates and Market Reactions - Changes in earnings estimates are crucial for predicting investor reactions to stock performance, with empirical research showing a strong correlation between earnings estimate revisions and short-term stock price performance [2] Key Metrics Forecast - Analysts predict 'Comparable store sales - YoY change' to be 1.7%, down from 4.0% in the same quarter last year [4] - The estimated 'Store count at end of period' is expected to reach 2,234, an increase from 2,148 a year ago [4] - The 'Number of stores opened' is forecasted to be 31, compared to 24 in the same quarter last year [4] Stock Performance - Over the past month, shares of Ross Stores have increased by 13.1%, outperforming the Zacks S&P 500 composite, which rose by 3.5% [5] - Ross Stores currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [5]

Group 1: Earnings Performance - The earnings reports for Q2 of the S&P 500 companies have largely exceeded expectations, with profits growing approximately 12% year-over-year, significantly higher than the 5% growth predicted by analysts in early July [1][2]. - Over two-thirds of the profit growth in Q2 came from the communication services and information technology sectors, primarily driven by the performance of technology companies [2][3]. - The S&P 500 index has risen 29% from its low in April, with a year-to-date increase of 9.7% [2]. Group 2: Retail Sector Focus - A series of major retail companies, including Home Depot, Lowe's, Target, and Walmart, are set to report their earnings, which will conclude the earnings season [4][5]. - The LSEG retail/dining index anticipates a 5.7% year-over-year profit growth, with major retailers like Walmart and Costco expected to see profit growth rates approximately 31% higher than last year [5]. - Strong retail sales in June and July, along with low unemployment and good consumer confidence, are positive indicators for many retailers in Q2 [4]. Group 3: Economic Outlook and Consumer Behavior - There is a noted "polarization" in the economy, with companies not benefiting from AI spending struggling to maintain their positions [3]. - Some analysts express caution regarding future consumer spending, as 51% of surveyed consumers plan to cut back on expenditures due to economic conditions [6]. - Retailers are expected to discuss pricing strategies extensively this earnings season, with discount retailers like Walmart and Costco likely to benefit from consumer demand for affordable goods [6].

Group 1 - The company focuses on providing an investing service and community centered around oil and natural gas, emphasizing cash flow and the potential for value and growth [1] - Subscribers have access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [2] - A promotional offer is available for a two-week free trial to attract new subscribers [3]

Core Insights - Ross Stores (ROST) is positioned to potentially continue its earnings-beat streak in upcoming reports, having surpassed earnings estimates by an average of 5.64% in the last two quarters [1] Earnings Performance - For the most recent quarter, Ross Stores reported earnings of $1.43 per share against an expectation of $1.47 per share, resulting in a surprise of 2.80%. In the previous quarter, the company exceeded the consensus estimate of $1.65 per share by reporting $1.79 per share, achieving a surprise of 8.48% [2] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Ross Stores, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat, especially when combined with a solid Zacks Rank [4][7] - The current Earnings ESP for Ross Stores is +1.23%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [7] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]

Core Viewpoint - Investors in Ross Stores, Inc. (ROST) should closely monitor the stock due to significant implied volatility in the options market, particularly for the Sep 19, 2025 $70.00 Call option [1] Group 1: Implied Volatility - Implied volatility indicates the market's expectation of future price movement, with high levels suggesting anticipation of a significant price change or an upcoming event that could trigger a rally or sell-off [2] - The current high implied volatility for Ross Stores may signal a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4] Group 2: Analyst Sentiment - Ross Stores holds a Zacks Rank 3 (Hold) within the Retail - Discount Stores industry, which is in the top 32% of the Zacks Industry Rank [3] - Over the past 30 days, no analysts have raised their earnings estimates for the current quarter, while one analyst has lowered the estimate, resulting in a decrease in the Zacks Consensus Estimate from $1.54 to $1.53 per share [3]