Ross Stores(ROST) - 2026 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements, including earnings, comprehensive income, balance sheets, stockholders' equity, cash flows, and related notes on accounting policies, fair value, stock-based compensation, EPS, debt, taxes, and segment reporting, along with the independent auditor's report Condensed Consolidated Statements of Earnings This statement presents the company's unaudited financial performance, detailing sales, operating income, net earnings, and basic and diluted earnings per share for the reported periods Condensed Consolidated Statements of Earnings (Unaudited, $ thousands) | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Sales | $5,529,152 | $5,287,519 | $10,514,123 | $10,145,586 | | Operating income | $638,274 | $659,233 | $1,244,744 | $1,250,346 | | Net earnings | $507,995 | $527,148 | $987,244 | $1,015,138 | | Basic EPS | $1.57 | $1.60 | $3.05 | $3.07 | | Diluted EPS | $1.56 | $1.59 | $3.03 | $3.05 | Condensed Consolidated Statements of Comprehensive Income This statement presents the company's net earnings and total comprehensive income, highlighting the absence of other comprehensive income for the periods presented Condensed Consolidated Statements of Comprehensive Income (Unaudited, $ thousands) | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net earnings | $507,995 | $527,148 | $987,244 | $1,015,138 | | Comprehensive income | $507,995 | $527,148 | $987,244 | $1,015,138 | - The company reported no other comprehensive income for the periods presented[9] Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Condensed Consolidated Balance Sheets (Unaudited, $ thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :-------------------------------- | :------------- | :--------------- | :------------- | | Total current assets | $6,925,836 | $7,538,696 | $7,594,983 | | Property and equipment, net | $3,906,340 | $3,792,403 | $3,583,535 | | Total assets | $14,495,519 | $14,905,332 | $14,678,021 | | Total current liabilities | $4,392,008 | $4,661,825 | $4,874,240 | | Total liabilities and stockholders' equity | $14,495,519 | $14,905,332 | $14,678,021 | | Total stockholders' equity | $5,732,569 | $5,509,195 | $5,130,532 | Condensed Consolidated Statements of Stockholders' Equity This statement outlines changes in stockholders' equity, including net earnings, stock repurchases, and dividends declared, for the reported six-month periods Condensed Consolidated Statements of Stockholders' Equity (Unaudited, $ thousands) | Metric | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Balance at beginning of period | $5,509,195 | $4,871,326 | | Net earnings | $987,244 | $1,015,138 | | Common stock repurchased (inclusive of excise tax) | $(529,432) | $(529,339) | | Dividends declared | $(265,637) | $(245,751) | | Balance at end of period | $5,732,569 | $5,130,532 | Condensed Consolidated Statements of Cash Flows This statement details the company's cash inflows and outflows from operating, investing, and financing activities for the reported six-month periods Condensed Consolidated Statements of Cash Flows (Unaudited, $ millions) | Metric | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $1,078 | $961 | | Net cash used in investing activities | $(409) | $(334) | | Net cash used in financing activities | $(1,552) | $(830) | | Net decrease in cash, cash equivalents, and restricted cash | $(883) | $(203) | | Cash, cash equivalents, and restricted cash at end of period | $3,913 | $4,733 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements Note A: Summary of Significant Accounting Policies This note details the basis of presentation, key accounting estimates, policies for cash, property, leases, supply chain finance, dividends, repurchases, litigation, revenue recognition, and recently issued accounting standards Restricted Cash and Cash Equivalents ($000) | Date | Amount | | :--------------- | :------- | | August 2, 2025 | $66,277 | | February 1, 2025 | $65,718 | | August 3, 2024 | $64,571 | Depreciation and Amortization Expense ($000) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | $126,399 | $108,595 | | Six Months Ended | $242,337 | $217,781 | Amounts Owed to Participating Financial Institutions under SCF Program ($000) | Date | Amount | | :--------------- | :------- | | August 2, 2025 | $186,800 | | February 1, 2025 | $159,200 | | August 3, 2024 | $182,500 | - The Board of Directors declared a quarterly cash dividend of $0.4050 per common share on August 20, 2025, payable on September 30, 2025[26] - During the six months ended August 2, 2025, the Company repurchased 3.9 million shares for $525.0 million under its stock repurchase program, with $525.0 million remaining available as of August 2, 2025[27] Sales Mix by Merchandise Category | Category | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Home Accents and Bed and Bath | 23% | 24% | 24% | 25% | | Ladies | 23% | 23% | 23% | 23% | | Men's | 17% | 17% | 16% | 16% | | Accessories, Lingerie, Fine Jewelry, and Cosmetics | 15% | 14% | 15% | 14% | | Shoes | 13% | 13% | 13% | 13% | | Children's | 9% | 9% | 9% | 9% | | Total | 100% | 100% | 100% | 100% | - The Company is evaluating the impact of new accounting standards ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures) on its financial statements[31][32] Note B: Fair Value Measurements This note describes the three-tier fair value hierarchy and provides Level 1 fair value measurements for financial instruments, including cash, restricted cash, and deferred compensation assets Fair Value of Financial Instruments (Level 1, $000) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :--------------------------------------- | :------------- | :--------------- | :------------- | | Cash and cash equivalents | $3,847,016 | $4,730,744 | $4,668,137 | | Restricted cash and cash equivalents | $66,277 | $65,718 | $64,571 | | Nonqualified deferred compensation program | $204,363 | $196,786 | $181,855 | Note C: Stock-Based Compensation This note details stock-based compensation plans, including restricted stock, performance shares, and ESPP, summarizing award activity, recognized expense, and related tax benefits - Unamortized stock awards compensation expense was $278.2 million as of August 2, 2025, expected to be recognized over a weighted-average remaining period of 1.9 years[40] Total Stock-Based Compensation Expense ($000) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | $43,943 | $38,021 | | Six Months Ended | $83,239 | $78,468 | Tax Benefits Related to Stock-Based Compensation Expense ($000) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | $7,200 | $7,100 | | Six Months Ended | $13,800 | $15,000 | Note D: Earnings Per Share This note explains the computation of basic and diluted EPS, including the treatment of dilutive and anti-dilutive shares, and reconciles shares used in calculations Diluted Earnings Per Share ($) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | $1.56 | $1.59 | | Six Months Ended | $3.03 | $3.05 | Weighted-Average Diluted Shares Outstanding (000s) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | 324,796 | 331,511 | | Six Months Ended | 325,909 | 332,620 | - Approximately 28,000 and 57,000 weighted-average shares were excluded from the diluted EPS calculation for the three and six months ended August 2, 2025, respectively, due to their anti-dilutive effect[44] Note E: Debt This note details Senior Notes, including principal, maturities, and fair values, and outlines revolving credit facilities, highlighting the repayment of $700 million Senior Notes and the new $1.3 billion facility Senior Notes Outstanding ($000) | Date | Total Long-Term Debt | Current Portion | | :--------------- | :------------------- | :-------------- | | August 2, 2025 | $1,516,340 | $499,122 | | February 1, 2025 | $2,214,811 | $699,731 | | August 3, 2024 | $2,462,854 | $949,028 | - In April 2025, the Company repaid at maturity the $700 million principal amount of its 4.600% Senior Notes[47] - In June 2025, the Company entered into a new $1.3 billion senior unsecured revolving credit facility, replacing its previous facility[49] - As of August 2, 2025, there were no borrowings outstanding under this facility[50] Note F: Taxes on Earnings This note discusses factors influencing effective tax rates, including tax law changes, earnings, and stock-based compensation, detailing rates, the impact of OBBBA on deferred tax liabilities, and audit periods Effective Tax Rates | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | 24% | 25% | | Six Months Ended | 25% | 24% | - The one percent decrease in the effective tax rate for the three-month period ended August 2, 2025, was primarily due to the resolution of tax positions with various tax authorities[51] - The one percent increase in the effective tax rate for the six-month period ended August 2, 2025, was primarily due to the tax effects associated with stock-based compensation[51] - The 'One Big Beautiful Bill Act' (OBBBA), signed in July 2025, resulted in an approximate $30 million increase to the Company's deferred tax liability balance, primarily due to the reinstatement of 100% bonus depreciation[54] Note G: Segment Reporting This note clarifies that Ross and dd's DISCOUNTS segments are aggregated into one reportable segment due to similar characteristics, with operating income as the primary performance measure - The Company has two operating segments, Ross and dd's DISCOUNTS, which are aggregated into one reportable segment[55] Segment Financial Information ($000) | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Sales | $5,529,152 | $5,287,519 | $10,514,123 | $10,145,586 | | Segment operating income | $638,274 | $659,233 | $1,244,744 | $1,250,346 | Report of Independent Registered Public Accounting Firm This report confirms that the independent registered public accounting firm reviewed the interim financial information and found no material modifications necessary for GAAP conformity - Deloitte & Touche LLP, the independent registered public accounting firm, reviewed the interim financial information and found no material modifications necessary for conformity with GAAP[58] - The firm also confirmed that the condensed consolidated balance sheet as of February 1, 2025, is fairly stated in all material respects in relation to the audited consolidated financial statements[59] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on financial performance, condition, and outlook, covering operations, macroeconomic influences, store expansion, sales metrics, income statement analysis, liquidity, capital resources, and forward-looking statements Overview Ross Stores, Inc. operates Ross Dress for Less and dd's DISCOUNTS, offering off-price apparel and home fashions, with 1,873 Ross and 360 dd's DISCOUNTS stores as of August 2, 2025 - Ross Dress for Less operates 1,873 locations in 44 states, the District of Columbia, Guam, and Puerto Rico[64] - dd's DISCOUNTS operates 360 stores in 22 states[64] - Ross offers savings of 20% to 60% off, while dd's DISCOUNTS offers savings of 20% to 70% off regular prices[64] Macroeconomic Conditions The company operates in an uncertain macroeconomic environment with elevated tariffs and inflation, focusing on value delivery and leveraging its off-price model to capture market share - The macroeconomic environment remains uncertain with elevated tariffs and broad-based inflationary pressures[65] - The Company is focused on offering high-quality, branded merchandise at outstanding values and expects its flexible off-price business model to help navigate challenges and capture market share[65] Store Openings The company opened 31 new stores in Q2 fiscal 2025, totaling 50 for the first six months, and plans to open approximately 90 new stores for the full fiscal year - Opened 31 new stores in Q2 fiscal 2025, including expansion into the New York Metro area and three inaugural stores in Puerto Rico[66] - Opened a total of 50 new stores in the first six months of fiscal 2025[66] - On track to open approximately 90 new stores in fiscal 2025 (80 Ross and 10 dd's DISCOUNTS)[66] Sales Metrics This section defines comparable store sales for existing store performance, non-comp store sales for new and closed locations, and introduces 'traffic' and 'basket' metrics for deeper sales insights - Comparable store sales are defined as sales from stores open for 14 complete months[68] - Non-comp store sales include sales from new stores open less than 14 months and stores that are permanently or temporarily closed[69] - Customer purchasing behavior metrics, 'traffic' (number of transactions) and 'basket' (average transaction value), provide additional insight into comp store sales[72] Results of Operations This section analyzes the company's financial performance for the three and six-month periods ended August 2, 2025, detailing sales, cost of goods sold, SG&A, operating income, interest, taxes, and EPS, with focus on tariffs and distribution center costs Sales This section analyzes the company's sales performance, including total sales and comparable store sales growth, for the three and six-month periods ended August 2, 2025 Sales Performance | Metric | Three Months Ended Aug 2, 2025 | Three Months Ended Aug 3, 2024 | Six Months Ended Aug 2, 2025 | Six Months Ended Aug 3, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Sales (billions) | $5.5 | $5.3 | $10.5 | $10.1 | | Sales growth | 5% | 7% | 4% | 8% | | Comparable store sales growth | 2% | 4% | 1% | 3% | - The 2% increase in comparable store sales for the three-month period reflects an approximate 1% increase in basket and 1% increase in traffic[73] - The 1% increase in comparable store sales for the six-month period is primarily due to an increase in basket[74] Cost of goods sold This section analyzes changes in cost of goods sold as a percentage of sales, highlighting impacts from distribution costs, new distribution centers, and merchandise margin, including tariffs Cost of Goods Sold as a Percentage of Sales | Period | August 2, 2025 | August 3, 2024 | Change (bps) | | :------------------- | :------------- | :------------- | :----------- | | Three Months Ended | 72.4% | 71.7% | +70 | | Six Months Ended | 72.1% | 71.8% | +35 | - The 70 basis point increase for the three-month period was primarily due to a 55 basis point increase in distribution costs (new distribution center and tariff-related processing costs) and a 30 basis point decrease in merchandise margin (including tariffs)[77] - The 35 basis point increase for the six-month period was primarily due to a 35 basis point decrease in merchandise margin (including tariffs) and a 30 basis point increase in distribution costs (new distribution center and tariff-related processing costs)[78] Selling, general and administrative expenses This section analyzes changes in selling, general and administrative expenses as a percentage of sales, primarily attributing increases to CEO transition costs Selling, General and Administrative Expenses as a Percentage of Sales | Period | August 2, 2025 | August 3, 2024 | Change (bps) | | :------------------- | :------------- | :------------- | :----------- | | Three Months Ended | 16.1% | 15.8% | +25 | | Six Months Ended | 16.1% | 15.9% | +15 | - The increases were primarily due to costs associated with the Chief Executive Officer transition[80] Operating income This section analyzes operating income as a percentage of sales, highlighting the negative impact of tariff-related costs and expected deleverage from the new distribution center Operating Income as a Percentage of Sales | Period | August 2, 2025 | August 3, 2024 | Change (bps) | | :------------------- | :------------- | :------------- | :----------- | | Three Months Ended | 11.5% | 12.5% | -95 | | Six Months Ended | 11.8% | 12.3% | -50 | - Operating income for the second quarter of fiscal 2025 included an approximate 90 basis point negative impact from tariff-related costs[82] - The Company expects continued negative impact from tariff-related costs and cost of goods sold deleverage from the new distribution center in the second half of fiscal 2025[82] Interest income, net This section analyzes the net interest income, detailing the decrease primarily due to lower average interest rates and cash balances following Senior Notes repayments Interest Income, Net ($000) | Period | August 2, 2025 | August 3, 2024 | Change | | :------------------- | :------------- | :------------- | :------- | | Three Months Ended | $(32,346) | $(43,350) | $(11,004) | | Six Months Ended | $(66,755) | $(89,300) | $(22,545) | - The decrease was primarily due to lower average interest rates and lower average cash balances, largely from the repayment of $700 million Senior Notes in April 2025 and $250 million Senior Notes in September 2024[83] Taxes on earnings This section analyzes effective tax rates, explaining changes due to tax position resolutions, stock-based compensation, and the impact of the 'One Big Beautiful Bill Act' on deferred tax liabilities Effective Tax Rates | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Three Months Ended | 24% | 25% | | Six Months Ended | 25% | 24% | - The three-month effective tax rate decreased by 1% due to the resolution of tax positions, while the six-month rate increased by 1% due to tax effects associated with stock-based compensation[85] - The 'One Big Beautiful Bill Act' (OBBBA) increased the deferred tax liability balance by approximately $30 million as of August 2, 2025, primarily due to the reinstatement of 100% bonus depreciation[86] Earnings per share This section analyzes diluted earnings per share, attributing decreases to lower net earnings, partially offset by share repurchases, and highlighting the impact of tariff-related costs Diluted Earnings Per Share ($) | Period | August 2, 2025 | August 3, 2024 | Change | | :------------------- | :------------- | :------------- | :------- | | Three Months Ended | $1.56 | $1.59 | $(0.03) | | Six Months Ended | $3.03 | $3.05 | $(0.02) | - The decrease in diluted EPS was primarily attributable to a decrease in net earnings, partially offset by a 2% reduction in weighted-average diluted shares outstanding due to stock repurchases[87][88] - Tariff-related costs had an approximate $0.11 per share negative impact on earnings for both the three and six-month periods ended August 2, 2025[89] Stores This section provides a summary of the total store count for Ross Dress for Less and dd's DISCOUNTS at the end of the reported periods Store Count at End of Period | Brand | August 2, 2025 | August 3, 2024 | | :-------------- | :------------- | :------------- | | Ross Dress for Less | 1,873 | 1,795 | | dd's DISCOUNTS | 360 | 353 | | Total stores | 2,233 | 2,148 | Financial Condition This section details the company's liquidity and capital resources, analyzing cash flows from operating, investing, and financing activities, including debt, capital expenditures, repurchases, and dividends, while addressing contractual obligations and critical accounting estimates Liquidity and Capital Resources This section outlines the company's primary sources and uses of funds, including cash flows from operations, trade credit, inventory purchases, payroll, leases, taxes, capital expenditures, stock repurchases, debt repayment, and dividends - Primary sources of funds are cash flows from operations and short-term trade credit[90] - Primary cash requirements include merchandise inventory purchases, payroll, operating and variable lease costs, taxes, capital expenditures, stock repurchases, debt repayment, and dividends[90] - The Company ended Q2 fiscal 2025 with $3.8 billion in unrestricted cash balances and $1.3 billion available under its new 2025 Credit Facility[107] - The $500 million principal amount of 0.875% Senior Notes is due in April 2026[90] Operating Activities This section analyzes net cash provided by operating activities, highlighting increases driven by lower income taxes paid and reduced incentive compensation payments Net Cash Provided by Operating Activities ($ millions) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Six Months Ended | $1,078 | $961 | - The increase in cash flow from operating activities for the six-month period was primarily driven by lower income taxes paid and lower incentive compensation payments[93] Accounts Payable Leverage (Accounts Payable / Merchandise Inventory) | Date | Leverage | | :--------------- | :------- | | August 2, 2025 | 85% | | August 3, 2024 | 89% | - Packaway inventory was 38% of total inventory as of August 2, 2025, down from 41% as of February 1, 2025[96] Investing Activities This section analyzes net cash used in investing activities, primarily attributing changes to higher capital expenditures for a new distribution center and new store openings Net Cash Used in Investing Activities ($ millions) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Six Months Ended | $(409) | $(334) | - The change was primarily due to higher capital expenditures related to the construction of the next distribution center in Randleman, North Carolina, and new store openings[98] - Capital expenditures for fiscal 2025 are projected to be approximately $800 million, focusing on new and existing stores, supply chain investments (including a new distribution center), and information technology systems[99] Financing Activities This section analyzes net cash used in financing activities, detailing increases due to Senior Notes repayment, stock repurchases, and dividend payments Net Cash Used in Financing Activities ($ millions) | Period | August 2, 2025 | August 3, 2024 | | :------------------- | :------------- | :------------- | | Six Months Ended | $(1,552) | $(830) | - The significant increase in cash used was primarily due to the repayment of $700 million Senior Notes in April 2025, stock repurchases, and dividend payments[100] - During the six months ended August 2, 2025, the Company repurchased 3.9 million shares for $525 million under its stock repurchase program, with $525 million remaining available[103] - Cash dividends paid were $265.6 million for the six months ended August 2, 2025, compared to $245.8 million in the prior year[105] Contractual Obligations and Off-Balance Sheet Arrangements This section confirms no material changes to contractual obligations since the last annual report, other than those in the ordinary course of business, and details standby letters of credit and collateral trust - There have been no material changes to contractual obligations since the Annual Report on Form 10-K for February 1, 2025, other than those in the ordinary course of business[108] Standby Letters of Credit and Collateral Trust ($ millions) | Date | Standby Letters of Credit | Collateral Trust | | :--------------- | :------------------------ | :--------------- | | August 2, 2025 | $1.0 | $65.3 | | February 1, 2025 | $1.8 | $63.9 | | August 3, 2024 | $2.2 | $62.4 | Critical Accounting Estimates This section confirms that no significant changes to critical accounting estimates occurred during the second quarter of fiscal 2025 - No significant changes to critical accounting estimates occurred during the second quarter of fiscal 2025[111] Forward-Looking Statements This section contains forward-looking statements on projected sales, costs, earnings, store growth, capital expenditures, and liquidity, subject to risks like macroeconomic conditions, tariffs, competition, and supply chain disruptions - Forward-looking statements cover projected sales, costs, earnings, planned new store growth, capital expenditures, and liquidity[112] - Key risks and uncertainties include changes in U.S. tax, tariff, or trade policy (especially regarding China), macroeconomic environment (inflation, interest rates, recession, geopolitical conditions), consumer spending, competitive pressures, inventory management, import risks, unseasonable weather, dependence on merchandise availability, information/data security breaches, supply chain disruptions, new store site acquisition, legal/regulatory/tax matters, reputation damage, talent retention, and liquidity[113][121] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate changes, with fixed-rate Senior Notes and a variable-rate credit facility, and a 100 basis point rate change is not expected to materially impact financial position or results - The Company's primary market risk is from changes in interest rates; it does not engage in speculative financial transactions[115] - Interest on Senior Notes is based on fixed rates, while the 2025 Credit Facility has variable rates (no outstanding borrowings as of August 2, 2025)[116] - A hypothetical 100 basis point increase or decrease in market interest rates would not have a material negative impact on the Company's financial position, results of operations, cash flows, or fair values[118] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective, and no material changes to internal control over financial reporting occurred in Q2 fiscal 2025 Disclosure Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the reporting period[119] Quarterly Evaluation of Changes in Internal Control Over Financial Reporting Management concluded that no material changes to the company's internal control over financial reporting occurred during the second fiscal quarter of 2025 - Management concluded that there were no material changes to the Company's internal control over financial reporting during the second fiscal quarter of 2025[122] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section references legal proceedings from Note A, detailing class/representative action lawsuits primarily in California regarding wage and hour laws, which management believes will not materially impact financial results - The Company is involved in class/representative action lawsuits, primarily in California, alleging violations of wage and hour laws[29] - Management believes the resolution of currently pending litigation will not have a material adverse effect on the Company's financial condition, results of operations, or cash flows[31] Item 1A. Risk Factors This section outlines key risk factors, including macroeconomic and retail industry business risks like inflation, tariffs, supply chain disruptions, and consumer spending, alongside strategic risks related to importing merchandise, especially from China MACROECONOMIC AND RETAIL INDUSTRY BUSINESS RISKS This section details macroeconomic and retail industry business risks, including impacts from financial markets, geopolitical conditions, government policy, inflation, tariffs, and supply chain disruptions - The Company is subject to impacts from changes in the macroeconomic environment, financial and credit markets, geopolitical conditions, and government regulation or policy[125] - Continuing inflation, tariff increases, potential supply chain disruptions, and other external events may significantly negatively affect costs, consumer confidence, shopping behavior, and spending[125] - The Company is especially susceptible to changes in the U.S. economy and its trade policy (particularly toward China) as all stores are in the U.S. and over half of goods originate from China[126] STRATEGIC RISKS This section outlines strategic risks related to importing merchandise, including increased tariffs, quotas, economic disruptions, and foreign regulations, particularly concerning goods manufactured in China - Risks associated with importing and selling merchandise produced in other countries include increased tariffs, quotas, economic and supply chain disruptions, and foreign government regulations[131] - More than half of the merchandise sold by the Company is originally manufactured in China, making it vulnerable to changes in U.S. trade or tax policy towards China[130][132] - Changes in tariffs or the value of the U.S. dollar relative to foreign currencies could increase the cost of products purchased from overseas and domestic vendors reselling foreign-produced goods[132] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details common stock repurchases in Q2 fiscal 2025, including 1.9 million shares bought for $266.7 million under the $2.1 billion program, with $525.0 million remaining available Common Stock Repurchases (Q2 Fiscal 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :----- | :--------------------- | :--------------------------- | | May | 445,768 | $144.64 | | June | 824,677 | $133.64 | | July | 688,923 | $133.69 | | Total | 1,959,368 | $136.16 | - As of August 2, 2025, $525.0 million remained available for repurchase under the $2.1 billion stock repurchase program approved in March 2024[134] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, credit agreements, stock incentive plans, auditor's letter, CEO/CFO certifications, and XBRL documents - Exhibits include the Certificate of Incorporation, Amended and Restated Bylaws, Credit Agreement dated June 27, 2025, Form of Notice of Grant of Performance Shares, Letter re: Unaudited Interim Financial Information from Deloitte & Touche LLP, CEO and CFO Certifications (Sarbanes-Oxley Act Section 302(a) and 18 U.S.C. Section 1350), and various XBRL documents[136] Signatures This section confirms the report's signing by Jeffrey P. Burrill, Senior Vice President, Chief Accounting Officer, and Corporate Controller, as the Principal Accounting Officer for Ross Stores, Inc - The report was signed by Jeffrey P. Burrill, Senior Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer) on September 9, 2025[139]