Ross Stores delivered an outstanding first quarter in 2026, marked by a substantial 21% increase in total sales and an impressive 37% surge in earnings per share. This remarkable performance was underpinned by a robust 17% growth in comparable store sales, largely driven by a significant uptick in customer transactions across all demographic segments. The company's strategic focus on aggressive expansion, with plans to open 110 new locations, alongside a commitment to enhancing customer experience through revitalized merchandising, targeted marketing, and optimized in-store operations, positions it for sustained growth.
The first quarter saw Ross Stores achieve strong comparable store sales, primarily propelled by an increase in the number of customer transactions. This growth was widespread, encompassing various income levels, ethnic backgrounds, and age groups, including a notable rise in younger customers. The company's strategic initiatives, such as refining the media mix and modernizing creative messaging, have significantly boosted customer acquisition and engagement. Jim Conroy, the CEO, highlighted that this transactional growth is a key indicator of the company's health, distinguishing it from other forms of sales increases. This consistent transactional momentum over three consecutive quarters underscores the effectiveness of their customer-centric approach.
A significant factor contributing to this success was the effective transition from the holiday season into spring, supported by well-balanced inventory levels that met strong demand, particularly in February, a period that historically posed challenges for the company. The strength was uniformly observed across all merchandise categories and geographical regions, with ladies' apparel and cosmetics emerging as top performers. Inventory management remained a priority, with levels up by 12% and packaway inventory constituting 36% of the total, ensuring adequate stock to meet ongoing demand.
Looking forward, Ross Stores is not only expanding its physical footprint but also innovating its marketing strategies. The company aims to introduce new brands and broaden its product assortment to cater to a wider customer base, including those seeking higher price points. This expansion strategy, coupled with ongoing store modernizations, such as updated signage and cosmetic repairs, is designed to enhance the shopping experience and attract new demographics. Michael Hartshorn, Group President and COO, emphasized the success of new store openings, particularly in the Northeast, which have exceeded initial projections, signaling strong potential for future growth in these markets.
The company's financial outlook for the second quarter anticipates comparable store sales growth of 6-7% and earnings per share in the range of $1.85 to $1.93. For the full fiscal year 2026, Ross Stores has revised its sales and earnings guidance upwards, projecting an EPS growth of 13-17% compared to the previous year. This optimistic forecast reflects the exceptional first-quarter results and the solid momentum expected in the second quarter. The management team expressed confidence in their ability to navigate potential macroeconomic pressures, such as fluctuating fuel prices, by capitalizing on opportunities for value-seeking customers and strategically sourcing closeout merchandise.