Ross Stores lifted its full-year outlook to $8.61-$8.77 a share, and told you in the same sentence that roughly $0.60 of it is a tariff refund. Back that out and the raise over the May guide is closer to half a dollar than a full one.

by Clara Borresen · August 21, 2026

Senior Earnings Analyst, Earnings Dispatch

Ross Stores (Nasdaq: ROST) raised its fiscal 2026 earnings guidance on Thursday afternoon to a range of $8.61 to $8.77 a share, up from the $7.50 to $7.74 range it set in May. That is a raise of between $1.03 and $1.11 depending on which end you take. It is also, in Chief Executive Jim Conroy's own wording, a range that "again includes an approximate $0.60 earnings per share benefit from IEEPA tariff refunds recognized in the second quarter." The May release set its $7.50 to $7.74 range with no mention of IEEPA or of any tariff refund outside its standard risk-factor language, so backing the $0.60 out leaves an operational raise of roughly $0.43 to $0.51 — still a substantial move, but less than half of the headline.

The refunds are the single most important number in the release, and Ross puts them in plain view rather than in a reconciliation appendix. The off-price retailer said second-quarter operating profit of $1.1 billion included approximately $253 million from IEEPA tariff refunds, worth about $0.60 per share, and that operating margin increased 610 basis points including 405 basis points from the refunds. Excluding that benefit, operating margin rose 205 basis points, which the company described as well above its plan for an increase of 130 to 150 basis points.

Both of those framings check out arithmetically, though the per-share one has to be reconstructed. Ross discloses the roughly $0.60 benefit but publishes no after-tax bridge for it, so what follows is this desk's arithmetic off the company's own statements, not a figure Ross printed. Total sales for the 13 weeks ended August 1, 2026 were $6,264,886 thousand; a $253 million pre-tax credit against that revenue base is 404 basis points, consistent with the 405 the company cites. On the per-share figure, Ross's second-quarter provision for taxes was $283,463 thousand on pre-tax earnings of $1,134,762 thousand, an effective rate of 24.98%. Taxing $253 million at that rate leaves roughly $190 million, and dividing by the 319,450 thousand weighted-average diluted shares in the quarter gives about $0.59 — rounding to the $0.60 Ross discloses. The bridge holds.

It matters because Ross publishes no non-GAAP earnings measure at all. The $2.66 in the headline is GAAP diluted EPS, and the tariff refund is inside it. The company does supply an ex-refund operating margin figure — up 205 basis points once the 405 points of refund benefit come out — but there is no adjusted earnings-per-share number that strips the refund out and no reconciliation table to consult. A reader who wants the underlying figure has to construct it: $2.66 less $0.60 is approximately $2.06.

That distinction reshapes the comparison to Wall Street. Benzinga, in a premarket note, reported the result as "$2.66 versus estimates of $1.94" — without naming which compiler produced the $1.94, so the basis of that estimate is unknown. Against the reported GAAP figure, $1.94 implies a beat of about 72 cents. Against the ex-refund $2.06, it implies about 12 cents. Which of those is the fair comparison depends entirely on whether the estimate itself contemplated the refunds, and the reporting does not say. This is a case where the size of a "beat" is a function of the basis, not the business.

A cleaner benchmark is Ross's own guidance. In May the company guided second-quarter EPS to $1.85 to $1.93, against $1.56 in the prior-year quarter. It delivered $2.66. Strip the refund and the $2.06 result still clears the top of that guide by 13 cents and the midpoint by about 17 cents. So there is real operational outperformance here; it is simply about a quarter the size of what the headline number implies.

The sales line needs no such qualification. Second-quarter sales rose 13% to $6.265 billion from $5.529 billion a year earlier, with comparable store sales up 10%. Ross said the comp gain was primarily driven by customer traffic, reflecting both an increase in new customers and higher engagement from existing ones — a composition that is generally harder to manufacture than a ticket-driven comp. Net income was $851 million against $508.0 million a year earlier. For the first six months, sales rose 17% to $12.3 billion, comparable store sales rose 13%, net income was $1.5 billion and diluted EPS was $4.69.

The forward ranges are where the company is signalling a slowdown. Ross now expects comparable store sales up 6% to 7% in the third quarter and 4% to 5% in the fourth, with EPS of $1.75 to $1.83 and $2.17 to $2.26 respectively. Set that against 17% comps in the first quarter and 10% in the second and the implied trajectory is a steady deceleration through the back half — from double digits to mid single digits to low-to-mid single digits.

The full-year range is close to a straight sum of the pieces, and the low end is exact. First-half EPS of $4.69 plus the bottom of the third-quarter guide at $1.75 plus the bottom of the fourth-quarter guide at $2.17 equals $8.61 — precisely the low end of the annual range. The high end does not tie: $4.69 plus $1.83 plus $2.26 is $8.78, a penny above the $8.77 Ross published. The gap is in the company's own published figures, not in anything reconstructed here, and the release does not explain it. Two ordinary mechanics account for it without any hidden assumption: every one of those per-share figures is rounded to the cent, and an annual EPS figure is struck on a full-year weighted-average share count that need not match the sum of separately struck quarterly ones. It is still worth noticing that the annual range is not simply the quarterly ranges added up at both ends.

Note also what the guidance does not do: it does not extend the tariff benefit into the back half. Conroy's own sentence describes the roughly $0.60 as "recognized in the second quarter," so the annual range carries it as a first-half actual rather than a second-half expectation. On that reading, the third- and fourth-quarter EPS ranges are clean operating numbers, and the year-over-year growth they imply is not flattered by refunds.

Chief Executive Jim Conroy's commentary in the release was mostly upbeat, but not unqualified. "We achieved stellar sales and earnings growth in the second quarter. I am incredibly proud of our teams across the Company, whose dedication and strong execution drove these outstanding results," he said. On the outlook, the optimism came with a caveat attached: "Looking ahead, we exited the second quarter with building momentum and are excited for the plans we have in place entering the Fall season. Despite facing significantly more challenging year-over-year comparisons in the back half, we are raising our outlook for both the third and fourth quarters." That back-half comparison problem is the same one visible in the guided comp deceleration. The refund's contribution is addressed in his guidance sentence and in the release's financial discussion rather than in either of these passages.

On capital returns and footprint, Ross repurchased 1.4 million shares for $319 million in the quarter under the two-year $2.55 billion authorisation its board approved in March 2026, and said it remains on track to buy back a total of $1.275 billion of stock during fiscal 2026 — the same annual figure it carried in May. Diluted shares averaged 319,450 thousand in the quarter, down from 324,796 thousand a year earlier, so the smaller denominator lifted per-share earnings about 1.7% relative to the growth in net income. The company opened 47 new stores in the quarter, 35 Ross and 12 dd's DISCOUNTS, and raised its full-year plan to 115 openings, consisting of approximately 90 Ross Dress for Less and 25 dd's DISCOUNTS stores.

Ross issued the release at 4:01 p.m. Eastern on Thursday, August 20, after the close, and held its conference call at 4:15 p.m. Eastern the same day. Benzinga reported the shares at $249.68 in premarket trading on Friday, August 21, up 9.1%, in a note timestamped 4:53 a.m. Eastern. That is a premarket quote, not a closing move; Friday's regular session had not finished at the time of writing, and the company has not yet had a completed trading day in which to price the results.