ROSS STORES, INC.

Previous wording

Ross Stores, Inc. operates two brands of off-price retail apparel and home fashion stores—Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS®. Ross is the largest off-price apparel and home fashion chain in the United States, with 1,917 locations in 44 states, the District of Columbia, Guam, and Puerto Rico as of May 2, 2026. Ross offers first-quality, in-season, brand name and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. We also operate 365 dd’s DISCOUNTS stores in 23 states as of May 2, 2026 that feature a more moderately-priced assortment of first-quality, in-season apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day.

Current wording

Ross Stores, Inc. operates two brands of off-price retail apparel and home fashion stores—Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS®. Ross is the largest off-price apparel and home fashion chain in the United States, with 1,952 locations in 44 states, the District of Columbia, Guam, and Puerto Rico as of August 1, 2026. Ross offers first-quality, in-season, brand name and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. We also operate 376 dd’s DISCOUNTS stores in 23 states as of August 1, 2026 that feature a more moderately-priced assortment of first-quality, in-season apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day.

Previous wording

Financial results for the first quarter of fiscal 2026 were as follows:

Current wording

Financial results for the second quarter of fiscal 2026 were as follows:

Previous wording

•Operating income as a percentage of sales was 13.4%, compared to 12.2% in the first quarter of fiscal 2025.

Current wording

•Operating income as a percentage of sales was 17.6%, compared to 11.5% in the second quarter of fiscal 2025.

Previous wording

The following table summarizes the stores opened and closed during the three month periods ended May 2, 2026 and May 3, 2025:

Current wording

The following table summarizes the stores opened and closed during the three and six month periods ended August 1, 2026 and August 2, 2025:

Previous wording

We opened 17 new stores in the first quarter of fiscal 2026 and remain on track to open a total of approximately 110 new stores this year, comprised of about 85 Ross stores and 25 dd’s DISCOUNTS stores. We expect to open 47 stores in the three month period ending August 1, 2026, including 35 Ross and 12 dd’s DISCOUNTS locations.

Current wording

We opened 47 new stores in the second quarter of fiscal 2026, consisting of 35 Ross stores and 12 dd’s DISCOUNTS stores. We expect to open 51 stores in the three month period ending October 31, 2026, including 41 Ross and 10 dd’s DISCOUNTS locations. Due to the success of our expansion strategy across both new and existing markets, we are increasing our store opening plan to approximately 115 new stores this year, comprised of about 90 Ross stores and 25 dd’s DISCOUNTS stores.

Previous wording

The following table summarizes our financial results for the three month periods ended May 2, 2026 and May 3, 2025:

Current wording

The following table summarizes our financial results for the three and six month periods ended August 1, 2026 and August 2, 2025:

Previous wording

Sales. Sales for the three month period ended May 2, 2026 increased by approximately $1,026 million, or 21%, compared to the three month period ended May 3, 2025. This was primarily due to the 17% increase in comp store sales of $841 million and an increase in non-comp store sales of $185 million. The 17% increase in comp store sales was primarily driven by an approximately 11% increase in traffic and 6% increase in basket.

Current wording

Sales. Sales for the three month period ended August 1, 2026 increased by approximately $736 million, or 13%, compared to the three month period ended August 2, 2025. This was primarily due to the 10% increase in comp store sales of $534 million and an increase in non-comp store sales of $202 million. The 10% increase in comp store sales was primarily driven by an approximately 7% increase in traffic and 3% increase in basket.

Previous wording

Our sales mix for the three month periods ended May 2, 2026 and May 3, 2025 is shown below:

Current wording

Our sales mix for the three and six month periods ended August 1, 2026 and August 2, 2025 is shown below:

Previous wording

Cost of goods sold. Cost of goods sold for the three month period ended May 2, 2026 increased by approximately $649 million compared to the three month period ended May 3, 2025, primarily due to the increase in sales.

Current wording

Cost of goods sold. Cost of goods sold for the three and six month periods ended August 1, 2026 increased by approximately $143 million and $792 million, respectively, compared to the three and six month periods ended August 2, 2025, primarily due to the increase in sales. The increase was partially offset by the recovery of approximately $253 million of IEEPA tariffs during the three months ended August 1, 2026.

Previous wording

Cost of goods sold as a percentage of sales for the three month period ended May 2, 2026 decreased by approximately 145 basis points compared to the three month period ended May 3, 2025, primarily due to an 85 basis point increase in merchandise margin. Occupancy costs levered by 60 basis points. Distribution and domestic freight costs declined by 15 and 10 basis points, respectively. Partially offsetting these lower costs were higher buying costs of 25 basis points from higher incentive compensation expense.

Current wording

Cost of goods sold as a percentage of sales decreased by approximately 625 basis points for the three month period ended August 1, 2026, compared to the three month period ended August 2, 2025, primarily due to a 405 basis point benefit from the recovery of IEEPA tariffs. Merchandise margin increased 110 basis points. Distribution costs decreased 100 basis points mainly due to the timing of packaway inventory carrying costs, higher productivity, and tariff-related processing costs in the second quarter of fiscal 2025. Occupancy costs leveraged 25 basis points. Partially offsetting these benefits were higher domestic freight costs of 10 basis points due to increased fuel prices and higher buying costs of 5 basis points from higher incentive compensation expense.

Previous wording

Selling, general and administrative expenses. For the three month period ended May 2, 2026, selling, general and administrative expenses (“SG&A”) increased by approximately $179 million, compared to the three month period ended May 3, 2025, primarily due to higher store-related costs.

Current wording

Selling, general and administrative expenses. For the three and six month periods ended August 1, 2026, selling, general and administrative expenses (“SG&A”) increased by approximately $127 million and $306 million, respectively, compared to the three and six month periods ended August 2, 2025, primarily due to higher store-related costs.

Previous wording

SG&A as a percentage of sales for the three month period ended May 2, 2026 increased by approximately 25 basis points compared to the three month period ended May 3, 2025, primarily due to higher incentive compensation expense.

Current wording

SG&A as a percentage of sales for the three and six month periods ended August 1, 2026 increased by approximately 15 basis points and 20 basis points, respectively, compared to the three and six month periods ended August 2, 2025, primarily due to higher incentive compensation expense.

Previous wording

Operating income. Operating income as a percentage of sales for the three month period ended May 2, 2026 increased by approximately 120 basis points compared to the three month period ended May 3, 2025, primarily driven by the decrease in cost of goods sold as a percentage of sales period-over-period, partially offset by the increase in SG&A as a percentage of sales period-over-period.

Current wording

Operating income. Operating income as a percentage of sales for the three and six month periods ended August 1, 2026 increased by approximately 610 basis points and 370 basis points, respectively, compared to the three and six month periods ended August 2, 2025, primarily driven by the decrease in cost of goods sold as a percentage of sales period-over-period, partially offset by the increase in SG&A as a percentage of sales period-over-period.

Previous wording

Interest income, net. For the three month period ended May 2, 2026, interest income, net was relatively flat compared to the three month period ended May 3, 2025, as shown in the table below:

Current wording

Interest income, net. For the three and six month periods ended August 1, 2026, interest income, net was relatively flat compared to the three and six month periods ended August 2, 2025, as shown in the table below:

Previous wording

Taxes on earnings. Our effective tax rates for the three month periods ended May 2, 2026 and May 3, 2025 were approximately 22.4% and 25.2%, respectively. The decrease of 2.8% in the effective tax rate for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 was primarily due to the tax effects associated with stock-based compensation. Our effective tax rate represents the applicable combined federal and state statutory rates reduced by the federal benefit of state taxes deductible on federal returns. Our effective tax rate is impacted by changes in tax laws and accounting guidance, location of new stores, level of earnings, tax effects associated with stock-based compensation, and the resolution of tax positions with various tax authorities.

Current wording

Taxes on earnings. Our effective tax rates for the three month periods ended August 1, 2026 and August 2, 2025 were approximately 25.0% and 24.2%, respectively. The increase of 0.8% in the effective tax rate for the three month period ended August 1, 2026 compared to the three month period ended August 2, 2025 was primarily due to the resolution of tax positions with various tax authorities. Our effective tax rates for the six month periods ended August 1, 2026 and August 2, 2025 were approximately 23.9% and 24.7%, respectively. The decrease of 0.8% in the effective tax rate for the six month period ended August 1, 2026 compared to the six month period ended August 2, 2025 was primarily due to the tax effects associated with stock-based compensation. Our effective tax rate represents the applicable combined federal and state statutory rates reduced by the federal benefit of state taxes deductible on federal returns. Our effective tax rate is impacted by changes in tax laws and accounting guidance, location of new stores, level of earnings, tax effects associated with stock-based compensation, and the resolution of tax positions with various tax authorities.

Previous wording

Earnings per share. Diluted earnings per share for the three month period ended May 2, 2026 was $2.02 compared to $1.47 for the three month period ended May 3, 2025. The $0.55, or 37%, increase in diluted earnings per share for the three month period ended May 2, 2026 was primarily attributable to an approximately 36% increase in net earnings and 1% reduction in weighted-average diluted shares outstanding, largely due to stock repurchases under our stock repurchase program.

Current wording

Earnings per share. Diluted earnings per share for the three month period ended August 1, 2026 was $2.66 compared to $1.56 for the three month period ended August 2, 2025. The $1.10, or 71%, increase in diluted earnings per share for the three month period ended August 1, 2026 was primarily attributable to an approximately 68% increase in net earnings and an approximately 3% reduction in weighted-average diluted shares outstanding, largely due to stock repurchases under our stock repurchase program.

Previous wording

Our cash flows for the three month periods ended May 2, 2026 and May 3, 2025, are summarized in the table below:

Current wording

Our cash flows for the six month periods ended August 1, 2026 and August 2, 2025, are summarized in the table below:

Previous wording

Net cash provided by operating activities for the three month period ended May 2, 2026 increased by approximately $426 million compared to the three month period ended May 3, 2025, primarily due to higher net earnings, higher accounts payable leverage (defined as Accounts payable divided by Merchandise inventory), and higher current year incentive compensation accruals. Accounts payable leverage was 89% and 81% as of May 2, 2026 and May 3, 2025, respectively. The increase in accounts payable leverage was primarily due to the timing of inventory receipts and related payments versus last year.

Current wording

Net cash provided by operating activities for the six month period ended August 1, 2026 increased by approximately $634 million compared to the six month period ended August 2, 2025, primarily due to higher net earnings and higher current year incentive compensation accruals. Accounts payable leverage was 85% as of August 1, 2026 and August 2, 2025.

Previous wording

Changes in packaway inventory levels affect our operating cash flow. As of May 2, 2026, January 31, 2026, and May 3, 2025 packaway inventory was 36%, 37%, and 41% of total inventory, respectively.

Current wording

Changes in packaway inventory levels affect our operating cash flow. As of August 1, 2026, January 31, 2026, and August 2, 2025 packaway inventory was 36%, 37%, and 38% of total inventory, respectively.

Previous wording

Net cash used in investing activities for the three month period ended May 2, 2026 was relatively flat compared to the three month period ended May 3, 2025.

Current wording

Net cash used in financing activities for the six month period ended August 1, 2026 was relatively flat compared to the six month period ended August 2, 2025.

Previous wording

Senior notes. As of May 2, 2026, we had approximately $1.0 billion of outstanding Senior Notes, of which $241 million was classified in Current Liabilities on our Condensed Consolidated Balance Sheet for the period ended May 2, 2026. Refer to Note E: Debt in the Notes to Condensed Consolidated Financial Statements for additional information.

Current wording

Senior notes. As of August 1, 2026, we had approximately $1.0 billion of outstanding Senior Notes, of which $241.5 million was classified in Current Liabilities on our Condensed Consolidated Balance Sheet. Refer to Note E: Debt in the Notes to Condensed Consolidated Financial Statements for additional information.

Previous wording

Stock Repurchases. In March 2026, our Board of Directors approved a new, two-year program to repurchase up to $2.55 billion of our common stock through January 29, 2028. During the three month period ended May 2, 2026, we repurchased 1.5 million shares of common stock for $318.7 million (excluding excise tax) under this program. Refer to Note A: Summary of Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements for additional information relating to our stock repurchase program.

Current wording

Stock Repurchases. In March 2026, our Board of Directors approved a new, two-year program to repurchase up to $2.55 billion of our common stock through January 29, 2028. During the six month period ended August 1, 2026, we repurchased 2.9 million shares of common stock for $637.5 million (excluding excise tax) under this program. Refer to Note A: Summary of Significant Accounting Policies in the Notes to the Condensed Consolidated Financial Statements for additional information relating to our stock repurchase program.

Previous wording

Our Board of Directors declared a quarterly cash dividend of $0.4450 per common share in March 2026. Our Board of Directors declared a quarterly cash dividend of $0.4050 per common share in March, May, August, and November 2025.

Current wording

Our Board of Directors declared a quarterly cash dividend of $0.4450 per common share in March and May 2026. Our Board of Directors declared a quarterly cash dividend of $0.4050 per common share in March, May, August, and November 2025.

Previous wording

For the three month periods ended May 2, 2026 and May 3, 2025, we paid cash dividends of $143.6 million and $133.3 million, respectively.

Current wording

For the six month periods ended August 1, 2026 and August 2, 2025, we paid cash dividends of $286.2 million and $265.6 million, respectively.

Previous wording

We ended the first quarter of fiscal 2026 with $4.1 billion of unrestricted cash balances, which were held primarily in bank deposits, money market mutual funds, and U.S. Government and agency securities across a highly diversified set of banks and other financial institutions. We also have $1.3 billion available under our Credit Facility. We estimate that existing cash and cash equivalent balances, cash flows from operations, our Credit Facility, and trade credit are adequate to meet our operating cash needs and to fund our common stock repurchases, planned capital investments, quarterly dividend payments, debt repayments, and interest payments, for at least the next 12 months.

Current wording

We ended the second quarter of fiscal 2026 with $4.3 billion of unrestricted cash balances, which were held primarily in bank deposits, money market mutual funds, and U.S. Government and agency securities across a highly diversified set of banks and other financial institutions. We also have $1.3 billion available under our Credit Facility. We estimate that existing cash and cash equivalent balances, cash flows from operations, our Credit Facility, and trade credit are adequate to meet our operating cash needs and to fund our common stock repurchases, planned capital investments, quarterly dividend payments, debt repayments, and interest payments, for at least the next 12 months.

Previous wording

During the first quarter of fiscal 2026, there were no significant changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the year ended January 31, 2026.

Current wording

During the second quarter of fiscal 2026, there were no significant changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the year ended January 31, 2026.

Previous wording

•Adverse changes in the macroeconomic environment, government regulations and policies, geopolitical conditions, and financial and credit markets.

Current wording

•Adverse changes in the macroeconomic environment, government regulations and policies, geopolitical conditions and conflicts, and financial and credit markets.

Previous wording

•Continuing inflation and other external economic events and trends may have significant negative effects on our costs, and also on consumer confidence, shopping behavior, and spending.

Current wording

•Increased costs of fuel and other consumer necessities, continuing inflation, and other external economic trends and events may have significant negative effects on consumer confidence, shopping behavior, and spending, and also on our costs.

Previous wording

•Tariff increases (or threats of increases), and other changes and uncertainty in U.S. trade or tax policy regarding apparel, home-related merchandise, shoes, and other goods we sell that is produced in other countries.

Current wording

•Tariff increases (or threats of increases) and other changes and uncertainty in U.S. trade or tax policy regarding apparel, home-related merchandise, shoes, and other goods we sell that are produced in other countries.

Previous wording

The factors underlying our forecasts are dynamic and subject to change. As a result, any forecasts or forward-looking statements speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise these forward-looking statements.

Current wording

Other risk factors are set forth in our filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended January 31, 2026 and fiscal 2026 Form 8-Ks and 10-Q on file with the Securities and Exchange Commission. The factors underlying our forecasts and plans are dynamic and subject to change. As a result, any forecasts or forward-looking statements speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise these forward-looking statements.