Track market-moving stories before they get noisy

Don Kaufman (@Theotrade) calls the U.S. Treasury's $6 billion bond buyback plan "nominal" to investors seeking relief as the inflation picture gets wider by the day. However, he sees bearish opportunities in Wednesday's Big 3 by outlining example options trades in Ross Stores (ROST), Merck (MRK), and Apple (AAPL).

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.8% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Ross Stores (ROST - Free Report) Based in Dublin, CA, Ross Stores Inc. operates as an off-price retailer of apparel and home accessories, primarily in the United States. The company operates its stores under the Ross Dress for Less (Ross) and dd’s DISCOUNTS names. The company’s stores are located mostly in community and neighborhood shopping centers in heavily populated urban and suburban areas.

ROST is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. ROST has a Growth Style Score of A, forecasting year-over-year earnings growth of 32.8% for the current fiscal year.

For fiscal 2027, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $1.02 to $8.78 per share. ROST boasts an average earnings surprise of +11.2%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, ROST should be on investors' short list.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Ross Stores (ROST - Free Report) .

Ross Stores currently has an average brokerage recommendation (ABR) of 1.57, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 21 brokerage firms. An ABR of 1.57 approximates between Strong Buy and Buy.

Of the 21 recommendations that derive the current ABR, 15 are Strong Buy, representing 71.4% of all recommendations.

Brokerage Recommendation Trends for ROST

Check price target & stock forecast for Ross Stores here>>>

While the ABR calls for buying Ross Stores, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.

Is ROST Worth Investing In?In terms of earnings estimate revisions for Ross Stores, the Zacks Consensus Estimate for the current year has increased 7.2% over the past month to $8.02.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Ross Stores. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for Ross Stores may serve as a useful guide for investors.

ROST's Q2 earnings and sales beat estimates as traffic surges, margins expand and management raises its fiscal 2026 outlook.

Ross Stores (ROST - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.

Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.

Therefore, the Zacks rating upgrade for Ross Stores basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Ross Stores imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsEmpirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for Ross StoresFor the fiscal year ending January 2027, this discount retailer is expected to earn $8.78 per share, which is unchanged compared with the year-ago reported number.

Analysts have been steadily raising their estimates for Ross Stores. Over the past three months, the Zacks Consensus Estimate for the company has increased 5.2%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Ross Stores to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

The two biggest off-price retailers just reported the same 13 weeks of business, one day apart. The market treated them like different industries.

TJX (TJX -0.11%), the company behind TJ Maxx, Marshalls, and HomeGoods, reported Wednesday morning that its comparable sales -- sales at stores open long enough to compare with a year earlier -- grew 4% in its fiscal second quarter of 2027 (the period ended Aug. 1, 2026), above its own plan. The stock fell 4% that day and kept falling Thursday, leaving it within about 5% of its 52-week low.

Ross Stores (ROST +4.39%) reported its own quarter, covering the very same weeks, after Thursday's close. Comparable sales grew 10%. The stock jumped on Friday, closing up more than 4%.

What did the market see that the headline numbers miss? The answer sits in the two companies' second-half plans.

Image source: The Motley Fool.

Ross: the growth is broadeningRoss delivered the kind of quarter off-price investors have been waiting for. Total sales rose 13% year over year to $6.3 billion, and the 10% comparable sales gain was driven primarily by customer traffic (more people in stores, not just bigger baskets).

Even more encouraging, management said the growth drew on both new customers and higher engagement from existing ones. And the 10% gain came on top of just a 2% rise in the same quarter last year.

Additionally, net income climbed to $851 million from $508 million a year earlier, and earnings per share of $2.66 landed far above the company's own $1.85-to-$1.93 guidance. About $0.60 of that came from tariff refunds under the International Emergency Economic Powers Act (IEEPA), so the clean beat was smaller than it looks -- but it was still a beat, and the company raised its outlook on top of it.

That outlook is the part the market paid for. Ross now expects comparable sales to grow 6% to 7% in the third quarter and 4% to 5% in the fourth -- raised numbers, against tougher year-over-year comparisons. And the third-quarter range matches the comparable sales guidance Ross gave for the quarter it just beat by three points.

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TJX: bigger, steadier, slowingTJX's quarter was good by nearly every measure it guides on. Revenue rose 5% year over year to $15.2 billion, and earnings per share of $1.36, up 24%, came in well above plan.

Excluding a $0.14 net tariff-refund benefit, adjusted earnings per share still grew 11%.

Topping it all off, the company raised its full-year margin and earnings outlook, lifted its long-term store target to 7,500 locations, and returned $1.3 billion to shareholders in the quarter. And the stock fell anyway.

The problem was the composition.

Marmaxx, the U.S. division that includes TJ Maxx and Marshalls and generates most of TJX's sales, grew comparable sales just 1%, down from 3% a year ago. The strength came from everywhere else.

"While sales at Marmaxx were below our expectations, HomeGoods, TJX Canada, and TJX International all delivered terrific comp sales increases of 6% to 7%, which underscores the strength of our global diversified business," said CEO Ernie Herrman in the earnings release.

The second-half plan, I think, extends the slowdown. TJX expects third-quarter comparable sales growth of just 2% to 3% and full-year growth of 3% to 4%. That sales outlook was not raised. The earnings raise came from margin, and part of it from tariff refunds.

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The second half decided itPut the two plans side by side and the reactions stop looking strange. Ross just posted 10% comparable sales growth and told investors to expect 6% to 7% next quarter. TJX posted 4% and told investors to expect 2% to 3%, with its flagship division near flat.

The valuations sharpen the contrast.

TJX's market value sits near $155 billion, about twice Ross' $78 billion, and the stocks trade at similar valuations: TJX at about 26 times earnings, Ross at about 29 times earnings.

So investors are paying nearly the same price per dollar of profit for a company growing comparable sales at less than half the rate.

And forward price-to-earnings ratios, measured against each company's own raised full-year guidance, land in the same neighborhood.

Sure, TJX runs the bigger, more diversified business, and a turn at Marmaxx could change this comparison quickly. Herrman said the third quarter is off to a strong start overall, with improvement at Marmaxx, and he may prove the plan conservative. But off-price is a traffic business. Ross is still pulling more customers through its doors quarter after quarter, while growth at TJX's biggest U.S. banners has nearly stalled.

I think the market read the two reports correctly. The quarter was fine at both companies. The second half, by each management team's own numbers, belongs to Ross.

Shares of Ross Stores (ROST +4.39%) rose on Friday after the off-price retailer reported robust quarterly profits.

Image source: Getty Images.

Bargains are always in style Ross' total sales jumped 13% year over year to $6.3 billion in its fiscal 2026 second quarter, which ended on Aug. 1.

"Our performance was fueled by our compelling merchandise offerings, engaging marketing initiatives, and continued enhancements to the in-store experience," CEO Jim Conroy said.

The company's comparable store sales, which include revenue from stores open for more than 14 months, increased 10%.

"We were pleased to see strength throughout the quarter, with comparable store sales growth once again primarily driven by customer traffic," Conroy said. "Importantly, that growth was supported by both an increase in new customers and higher engagement from existing customers."

Rising sales at older stores are driving Ross to advance its expansion strategy. The retailer opened 47 new stores during the quarter, bringing its total store count to more than 1,950 locations across 44 states, the District of Columbia, Guam, and Puerto Rico.

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Better still, Ross is growing more profitable as it expands its store base. Its adjusted operating margin improved by more than 2 percentage points compared to the year-ago quarter.

All told, Ross' net income, boosted by $253 million in tariff refunds, came in at $851 million, up from $508 million in the prior-year period. Earnings per share rose to $2.66 from $1.56.

Store openings should continue to fuel earnings growth Ross expects to open a total of 115 new stores in 2026. Management sees sales at existing locations rising by 6% to 7% in the third quarter and 4% to 5% in the fourth quarter.

In turn, Ross projects full-year earnings per share of $8.61 to $8.77, up from $6.61 in fiscal 2025.

"We believe we are well-positioned to capture additional market share and drive profitable growth over the long term," Conroy said.

Key Takeaways ROST lifted its back-half outlook after Q2 comparable-store sales rose 10%, driven mainly by transactions.Ross Stores gained new and lapsed shoppers while existing customers visited more often and spent more.ROST plans 115 new fiscal 2026 locations as merchandising, store and marketing initiatives remain early. Ross Stores, Inc. (ROST - Free Report) used its second-quarter fiscal 2026 earnings call to emphasize sustained traffic gains, stronger merchandising and an improving store experience as the engines behind its momentum.

The retailer also raised its second-half outlook despite tougher comparisons, while executives stressed that many growth initiatives remain in early stages.

ROST Raises Back-Half ExpectationsZacks data showed earnings and revenues beat the Zacks Consensus Estimate by 6.7% and 1.9%, respectively. Chief financial officer William Sheehan said third-quarter comparable-store sales are now expected to rise 6% to 7%, with earnings per share of $1.75 to $1.83.

For the fourth quarter, Sheehan forecast comparable-store sales growth of 4% to 5% compared with a 9% increase last year, with earnings per share of $2.17 to $2.26.

Sheehan said full-year fiscal 2026 earnings per share are now projected at $8.61 to $8.77, including about $0.60 from tariff refunds recognized in the second quarter.

Ross Stores Sees Traffic as the Core Growth DriverChief executive officer James Conroy said the 10% comparable-store sales increase was driven mainly by transactions. Ross Stores added new customers, regained lapsed shoppers and increased shopping frequency among existing customers.

Conroy said new customers span income groups, age cohorts and ethnicities in a pattern similar to the existing customer base. He also cited higher spending among current shoppers and broad strength across merchandise categories and geographies.

Conroy described July as the strongest month of the quarter and said August trends remained encouraging. He said the customer metrics support continued momentum despite harder year-over-year comparisons.

ROST Says Growth Initiatives Remain EarlyConroy said Ross is still expanding initiatives across merchandising, stores and marketing, including new vendors and brands, improved store organization, shorter checkout lines and changes in creative messaging and media mix.

A Bank of America analyst asked which initiatives have the most runway. Conroy said numerous efforts remain short of full implementation across stores and merchandise categories.

An Evercore ISI analyst asked whether the momentum justified a higher long-term same-store sales algorithm. Group president and chief operating officer Michael Hartshorn said it was too early for a formal change, though Ross Stores expects to outperform that framework in the short term.

Ross Stores Defends Margin Flow-Through and PricingSheehan said second-quarter operating margin increased 610 basis points, including 405 basis points from tariff refunds. Excluding that benefit, operating margin improved 205 basis points, while merchandise margin rose 110 basis points.

A Goldman Sachs analyst asked whether stronger growth would require faster investment or alter profit flow-through. Conroy said Ross Stores plans to work largely within its existing model, and Sheehan reaffirmed 10 to 15 basis points of margin flow-through for each point of comparable-store sales growth.

Conroy said Ross Stores also intends to preserve its price gap compared with mainstream retail. For the back half, he expects modest low-single-digit average unit retail increases and said the company would adjust if its value position weakened.

ROST Expands Store and Inventory PlansConroy said consolidated inventory rose 18% at quarter-end, with packaway at 36% of inventory compared with 38% a year earlier. Hartshorn said store-level turns remained strong despite the higher inventory.

Hartshorn said Ross Stores is maintaining open-to-buy flexibility to capture closeout opportunities or adjust inventory if demand softens. Conroy added that merchandise margin improved in each of the past two quarters.

Hartshorn said the company now plans 115 new locations in fiscal 2026, up from 110. He said recent openings, including in the Northeast, are running ahead of the company’s planned first-year productivity range.

Ross Stores Keeps Strategy Focused on ExecutionConroy’s closing message centered on strengthening brand relevance, merchandise assortments and the in-store experience while maintaining disciplined execution.

Hartshorn also declined to reset the long-term growth algorithm. The call framed the strategy as continued test-and-learn execution rather than a shift toward materially higher structural spending.

ROST's Zacks Signals Show Mixed Style SupportROST currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Its Growth Score of A, Momentum Score of A and VGM Score of B indicate stronger readings across growth, price momentum and the combined style framework, while the Value Score of D is weaker.

Zacks Style Scores complement the Zacks Rank, with A and B representing stronger grades. A Zacks Rank of 3 is less favorable than the #1 and #2 ranks emphasized in the framework, and the Rank can change as earnings estimates are revised after the latest results.

Ross Stores (ROST) stock jumped Friday after the discount retailer topped quarterly estimates and raised its full-year outlook, citing strong demand for discounted offerings.

Ross Stores Inc (NASDAQ:ROST) shares are set to open more than 8% higher Friday after the discount retailer reported stronger-than-expected second quarter fiscal 2026 results, supported by higher customer traffic, and raised its full-year earnings outlook.

For the quarter ended August 1, Ross Stores reported sales of $6.3 billion, up 13% from $5.5 billion a year earlier.

Comparable store sales increased 10%, following a 2% gain in the prior-year quarter, with the company attributing the growth primarily to customer traffic.

Net income rose to $851 million, or $2.66 per share, from $508 million, or $1.56 per share, a year earlier. The result was above the company's guidance of $1.85 to $1.93 per share and included an approximately $253 million benefit from IEEPA tariff refunds, equivalent to about $0.60 per share.

Operating profit increased to $1.1 billion, while operating margin expanded 610 basis points. The tariff refunds contributed 405 basis points to the increase, while operating margin excluding the benefit improved by 205 basis points, ahead of the company's previous target of 130 to 150 basis points.

Ross Stores CEO Jim Conroy said in a statement that the company achieved "stellar sales and earnings growth" during the quarter, pointing to its merchandise offerings, marketing initiatives and improvements to the in-store experience.

"We were pleased to see strength throughout the quarter, with comparable store sales growth once again primarily driven by customer traffic," Conroy said.

He added that growth was supported by both an increase in new customers and higher engagement among existing customers.

The company raised its full-year fiscal 2026 earnings-per-share outlook to $8.61 to $8.77, including the approximately $0.60 per-share tariff refund benefit recognized in the second quarter.

It expects comparable store sales to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter, with projected EPS of $1.75 to $1.83 and $2.17 to $2.26, respectively.

Ross Stores also increased its 2026 store-opening plan to 115 locations, up from its previous plan. The retailer now expects to open approximately 90 Ross Dress for Less stores and 25 dd's DISCOUNTS locations.

It opened 47 stores in the second quarter, including 35 Ross and 12 dd's DISCOUNTS locations.

Ross Stores' shares surged nearly 9% in premarket trading on Friday, after the value retailer raised annual guidance and projected ​quarterly sales growth above analyst expectations, signalling bargain-hunting demand despite ‌a shaky economic backdrop.

Off-price retailer Ross Stores saw “robust” sales growth in the quarter ended Aug. 1 as both existing customers and new ones sought prices lower than those of mainstream retailers, CEO Jim Conroy said during a Thursday (Aug. 20) earnings call.

Ross Stores (ROST - Free Report) came out with quarterly earnings of $2.06 per share, beating the Zacks Consensus Estimate of $1.93 per share. This compares to earnings of $1.56 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +6.74%. A quarter ago, it was expected that this discount retailer would post earnings of $1.7 per share when it actually produced earnings of $2.02, delivering a surprise of +18.82%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Ross Stores, which belongs to the Zacks Retail - Discount Stores industry, posted revenues of $6.26 billion for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 1.89%. This compares to year-ago revenues of $5.53 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Ross Stores shares have added about 30.3% since the beginning of the year versus the S&P 500's gain of 12.6%.

What's Next for Ross Stores?While Ross Stores has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Ross Stores was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.74 on $5.95 billion in revenues for the coming quarter and $7.81 on $25.31 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Discount Stores is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Burlington Stores (BURL - Free Report) , is yet to report results for the quarter ended July 2026. The results are expected to be released on August 27.

This discount retailer is expected to post quarterly earnings of $2.18 per share in its upcoming report, which represents a year-over-year change of +37.1%. The consensus EPS estimate for the quarter has been revised 0.4% higher over the last 30 days to the current level.

Burlington Stores' revenues are expected to be $3.02 billion, up 11.8% from the year-ago quarter.

Burlington Is Winning Over Shoppers But Investors Need PatienceRoss Stores NASDAQ: ROST reported strong second-quarter fiscal 2026 results, with sales rising 13% to $6.3 billion and comparable-store sales increasing 10%, driven primarily by higher transaction volume. The company said the quarter marked its second consecutive period of double-digit comparable-store sales growth and that sales strengthened through the quarter, with July producing the strongest performance.

Chief Executive Officer Jim Conroy said customer traffic remained the primary contributor to the comparable-sales increase. The company saw gains from new shoppers, returning customers who had not visited in some time, and more frequent trips from existing customers. Those customers also spent more per visit, Conroy said.

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Ollie's Stock Has Lagged Despite Earnings Beats—What's Holding It Back?“The underlying metrics that we see are just extremely positive across the board,” Conroy said, pointing to broad-based growth across customer groups, merchandise categories and geographic markets.

Sales strength across categories and regions Ross said its customer gains spanned income levels, age groups and ethnicities, including younger shoppers. Conroy attributed the results to customer-acquisition efforts, marketing, improved store execution, broader merchandise assortments and expanded vendor relationships.

TJX: Retail’s Apex Predator Feasts on InflationAt the Ross banner, results were broad-based across merchandise categories and geographies. Home and cosmetics were the strongest businesses in the quarter, while the Midwest was the strongest region. The dd’s DISCOUNTS chain also posted solid and broad-based performance across merchandise and geographic areas, management said.

Conroy said the company’s merchant teams have added vendors and brands, while store teams have improved organization, inventory recovery and checkout queues. He said Ross is also gaining access to more popular brands, though not necessarily at higher price points, and remains committed to maintaining value-oriented pricing.

“We absolutely want to have the best values in our store,” Conroy said. He added that the company expects modest, low-single-digit average unit retail increases during the second half of the year.

Margins benefited from tariff refunds Second-quarter gross margin increased 625 basis points from the prior year, including 405 basis points of tariff refunds. Merchandise margin rose 110 basis points, while distribution costs declined 100 basis points, which the company attributed to favorable timing of packaway-related expenses, higher productivity and the anniversary of prior-year tariff-related processing costs.

Occupancy costs leveraged by 25 basis points. Those gains were partly offset by a 5-basis-point increase in buying costs from higher incentives and a 10-basis-point increase in freight costs due to higher fuel prices.

SG&A expense deleveraged by 15 basis points because of higher incentive compensation tied to earnings outperformance. Operating margin rose 610 basis points; excluding tariff refunds, operating margin increased 205 basis points year over year.

Net income increased to $851 million, or $2.66 per share, from $508 million, or $1.56 per share, a year earlier. For the first six months of fiscal 2026, sales rose 17% to $12.3 billion, comparable-store sales increased 13%, and earnings per share reached $4.69, compared with $3.03 in the prior-year period.

The company said its second-quarter and first-half results included $253 million, or about $0.60 per share, in tariff refunds.

Inventory and store growth plans Consolidated inventory was up 18% at quarter-end. Packaway inventory accounted for 36% of total inventory, compared with 38% a year earlier. Management said the inventory position supports elevated customer traffic and a broader selling-floor assortment while maintaining fast inventory turns.

Group President and Chief Operating Officer Michael Hartshorn said store-level inventory increased partly to support stronger demand, but in-store turns remained strong and clearance levels stayed low. He said Ross retains flexibility in its open-to-buy plans to respond to closeout opportunities or adjust inventory if demand changes.

Ross raised its planned store openings for fiscal 2026 to 115 locations from 110 previously, along with approximately five to 10 relocations and closures. The company expects to open 51 stores in the third quarter, including 41 Ross locations and 10 dd’s DISCOUNTS stores.

Hartshorn said recent openings have performed ahead of the company’s expectations, including in the Northeast, where Ross is continuing its expansion. The company’s long-term model contemplates approximately 5% annual unit growth, he said.

Raised second-half outlook Ross raised its outlook for both the third and fourth quarters despite more difficult comparisons in the second half.

Third-quarter comparable-store sales are expected to rise 6% to 7%, with total sales up 9% to 11%. Third-quarter earnings per share are forecast at $1.75 to $1.83, compared with $1.58 a year earlier. Fourth-quarter comparable-store sales are projected to increase 4% to 5%, following a 9% increase in the prior-year period. Fourth-quarter earnings per share are expected to range from $2.17 to $2.26, compared with $2.00 last year. Full-year earnings per share are now forecast at $8.61 to $8.77, versus $6.61 in fiscal 2025, including approximately $0.60 per share from tariff refunds. Chief Financial Officer Bill Sheehan said the third-quarter operating-margin outlook of 11.7% to 12.0%, versus 11.6% last year, assumes leverage from comparable-store sales growth and slightly higher merchandise margins. Higher fuel-related freight expense is expected to partially offset those gains.

Ross repurchased approximately 1.4 million shares for $319 million during the quarter and said it remains on track to repurchase $1.275 billion of stock during fiscal 2026 under its current authorization.

Management said it plans to continue testing and scaling initiatives across merchandising, marketing and store operations, while keeping investments within its established financial model. Conroy said the company believes it is still in the early stages of realizing the potential of its growth initiatives.

About Ross Stores (NASDAQ:ROST)Ross Stores, Inc NASDAQ: ROST is an American off‑price retailer headquartered in Dublin, California, that operates the Ross Dress for Less and dd's DISCOUNTS store formats. The company sells a broad assortment of apparel, footwear, home fashions, accessories and other soft goods, positioning itself as a value-oriented destination for brand‑name and fashion merchandise at reduced prices.

Ross's business model centers on opportunistic buying of excess inventory, closeouts, cancelled orders and overstocks from manufacturers, department stores and other suppliers.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Raises Second Half and Fiscal 2026 Outlook

, /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported financial results for the 13‑week quarter ended August 1, 2026.

Highlights:

Total sales for the second quarter of fiscal 2026 increased 13% versus last year, with comparable store sales up a very strong 10%, primarily driven by customer traffic. Second quarter operating profits were $1.1 billion, which includes approximately $253 million from IEEPA tariff refunds. Operating margin increased 610 basis points, including 405 basis points from the tariff refunds. Excluding this benefit, operating margin increased by 205 basis points, well above the Company's plan for an increase of 130 to 150 basis points. Earnings per share for the second quarter were $2.66, which includes an approximate $0.60 per share benefit from the tariff refunds, well above our guidance of $1.85 to $1.93.   Opened 47 new stores during the quarter, including 35 Ross and 12 dd's DISCOUNTS. Increasing 2026 store opening plans to 115 new locations. Jim Conroy, Chief Executive Officer, commented, "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. Our performance was fueled by our compelling merchandise offerings, engaging marketing initiatives, and continued enhancements to the in-store experience. We were pleased to see strength throughout the quarter, with comparable store sales growth once again primarily driven by customer traffic. Importantly, that growth was supported by both an increase in new customers and higher engagement from existing customers. These trends reinforce our belief that the actions we are taking are not only driving the current business performance but that we can continue to build on our early successes."

Second Quarter and First Six Months Results

Sales for the second quarter increased 13% to $6.3 billion, up from $5.5 billion in 2025. Comparable store sales rose a very strong 10% for the quarter on top of a 2% gain last year. Net income was $851 million versus $508 million last year, while earnings per share were $2.66 compared to $1.56 per share in the prior year period.

For the first six months of fiscal 2026, sales increased a robust 17% to $12.3 billion, up from $10.5 billion in 2025. Comparable store sales for the six-month period were up 13%. Net income was $1.5 billion versus $987 million last year, while earnings per share were $4.69 compared to $3.03 per share in the prior year period.

Both the second quarter and first six months 2026 results include about $253 million in IEEPA tariff refunds, benefiting earnings per share by approximately $0.60.

Update on Shareholder Payouts

During the 2026 second quarter, a total of 1.4 million shares of common stock were repurchased for an aggregate price of $319 million under the Company's two-year $2.55 billion authorization approved by its Board of Directors in March 2026. The Company remains on track to buy back a total of $1.275 billion in common stock during fiscal 2026.

Fiscal 2026 Guidance

Mr. Conroy commented, "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. Comparable store sales are now expected to increase 6% to 7% in the third quarter and 4% to 5% in the fourth quarter. If the second half of 2026 performs in line with these sales projections, our earnings per share ranges for the third and fourth quarters are projected to be $1.75 to $1.83 and $2.17 to $2.26, respectively."

Mr. Conroy continued, "Based on our strong first half results and our updated second half guidance, we are increasing our 2026 fiscal year earnings per share projections to be in the range of $8.61 to $8.77, which again includes an approximate $0.60 earnings per share benefit from IEEPA tariff refunds recognized in the second quarter. From a store growth perspective, we continue to be encouraged by the success of our expansion strategy across both new and existing markets. As a result, we are increasing our 2026 new store opening plan to 115 locations, consisting of approximately 90 Ross Dress for Less and 25 dd's DISCOUNTS stores."

Mr. Conroy concluded, "The year is off to a very strong start with the entire organization executing at a high level. As our efforts to improve topline growth continue, we remain focused on disciplined, consistent execution across the business. Moving forward, we believe we are well positioned to capture additional market share and drive profitable growth over the long term."

The Company will host a conference call on Thursday, August 20, 2026 at 4:15 p.m. Eastern time to provide additional details concerning its second quarter results and management's outlook for the second half and fiscal year 2026. A real-time audio webcast of the conference call will be available in the Investors section of the Company's website, located at www.rossstores.com. An audio playback will be available at 201-612-7415, PIN #13762049 until 8:00 p.m. Eastern time on August 27, 2026, as well as on the Company's website.

Forward-Looking Statements:  This press release and the related conference call remarks contain forward-looking statements regarding, without limitation, projected sales, costs and earnings, planned new store growth, capital expenditures, liquidity and other matters. These forward-looking statements reflect our then-current beliefs, plans, and estimates with respect to future events and our projected financial performance, operations, and competitive position, and they are subject to risks and uncertainties which could cause our actual results to differ materially from management's current expectations. The words "plan," "expect," "target," "anticipate," "estimate," "believe," "forecast," "projected," "guidance," "outlook," "looking ahead," and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® ("Ross") and dd's DISCOUNTS® include without limitation, risk from adverse changes in the macroeconomic environment, government regulations and policies, geopolitical conditions and conflicts, and financial and credit markets; 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; 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; competitive pressures and the pace of change in the retailing industry; unexpected changes in the level of consumer spending or preferences; adverse or unseasonable weather may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores; our dependence on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to source and purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices; our need to expand in existing markets and enter new geographic markets in order to achieve growth; our need to obtain acceptable new store sites with favorable consumer demographics in order to achieve growth; our need to continually attract, train, and retain associates with the retail talent necessary to execute our off-price retail strategies, as well as labor shortages, increased turnover, or increased labor costs; our need to effectively manage our inventories, markdowns, and inventory shortage in order to achieve our planned gross margins; information or data security breaches, including cyberattacks on our transaction processing and computer information systems, including malware intrusion, data exfiltration, identity theft, and other types of cybersecurity threats, could disrupt our operations, result in theft or unauthorized disclosure of our confidential and valuable business information or credit card and other customer information, and could disrupt our operations, damage our reputation, increase our costs, and create significant legal exposure; disruptions in our supply chain or in our information systems could impact our ability to process sales and to deliver product to our stores in a timely and cost-effective manner; risks associated with importing and selling merchandise produced in other countries; damage to our corporate reputation or brands; a natural or man-made disaster in a region where we have a concentration of stores, offices, or a distribution center; consumer problems or legal issues involving the quality, safety, or authenticity of products we sell could harm our reputation, result in lost sales, and/or increase our costs; an adverse outcome in various legal, regulatory, or tax matters, could damage our reputation or brand and increase our costs. Other risk factors are set forth in our SEC filings including the Form 10-K for fiscal 2025 and fiscal 2026 Form 8-Ks and 10-Q on file with the SEC. 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.

About Ross Stores, Inc.

Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2025 revenues of $22.8 billion. Currently, the Company operates Ross Dress for Less® ("Ross"), 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. 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. The Company also operates 376 dd's DISCOUNTS® stores in 23 states 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. Additional information is available at www.rossstores.com.

Ross Stores, Inc.

Condensed Consolidated Statements of Earnings

Three Months Ended

Six Months Ended

($000, except stores and per share data, unaudited)

August 1, 2026

August 2, 2025

August 1, 2026

August 2, 2025

Sales

$             6,264,886

$             5,529,152

$           12,275,362

$           10,514,123

Costs and Expenses

Cost of goods sold

4,145,215

4,002,167

8,375,804

7,583,533

Selling, general and administrative

1,016,053

888,711

1,991,914

1,685,846

Operating income

1,103,618

638,274

1,907,644

1,244,744

Interest income, net

(31,144)

(32,346)

(64,593)

(66,755)

Earnings before taxes

1,134,762

670,620

1,972,237

1,311,499

Provision for taxes on earnings

283,463

162,625

470,974

324,255

Net earnings

$                851,299

$                507,995

$             1,501,263

$                987,244

Earnings per share

Basic

$                     2.68

$                     1.57

$                     4.72

$                     3.05

Diluted

$                     2.66

$                     1.56

$                     4.69

$                     3.03

Weighted-average shares outstanding (000)

Basic

317,687

323,000

318,322

323,938

Diluted

319,450

324,796

320,343

325,909

Store count at end of period

2,328

2,233

2,328

2,233

Ross Stores, Inc.

Condensed Consolidated Balance Sheets

($000, unaudited)

August 1, 2026

August 2, 2025

Assets

Current Assets

Cash and cash equivalents

$                 4,288,124

$                 3,847,016

Accounts receivable

248,140

210,520

Merchandise inventory

3,087,370

2,608,485

Prepaid expenses and other

252,726

259,815

Total current assets

7,876,360

6,925,836

Property and equipment, net

4,257,806

3,906,340

Operating lease assets

3,545,351

3,374,582

Other long-term assets

302,763

288,761

Total assets

$               15,982,280

$               14,495,519

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable    

$                 2,621,740

$                 2,205,613

Accrued expenses and other

744,284

655,218

Current operating lease liabilities

752,302

716,162

Accrued payroll and benefits

440,837

315,893

Income taxes payable

84,916

—

Current portion of long-term debt

241,459

499,122

Total current liabilities

4,885,538

4,392,008

Long-term debt

777,053

1,017,218

Non-current operating lease liabilities

2,968,337

2,835,481

Other long-term liabilities

295,611

279,258

Deferred income taxes

312,557

238,985

Commitments and contingencies

Stockholders' Equity

6,743,184

5,732,569

Total liabilities and stockholders' equity

$               15,982,280

$               14,495,519

Ross Stores, Inc.

Condensed Consolidated Statements of Cash Flows

Six Months Ended

($000, unaudited)

August 1, 2026

August 2, 2025

Cash Flows From Operating Activities

Net earnings

$               1,501,263

$                  987,244

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

272,790

242,337

Stock-based compensation

106,377

83,239

Deferred income taxes

51,130

51,945

Change in assets and liabilities:

Merchandise inventory

(456,400)

(163,972)

Other current assets

(85,729)

(92,049)

Accounts payable

226,307

101,937

Other current liabilities 

65,676

(83,135)

Income taxes

29,788

(54,139)

Operating lease assets and liabilities, net

166

4,301

Other long-term, net 

399

369

Net cash provided by operating activities

1,711,767

1,078,077

Cash Flows From Investing Activities

Additions to property and equipment

(460,217)

(409,105)

Net cash used in investing activities

(460,217)

(409,105)

Cash Flows From Financing Activities

Issuance of common stock related to stock plans

13,183

12,380

Treasury stock purchased

(136,595)

(64,420)

Repurchase of common stock

(637,500)

(525,021)

Excise tax paid on repurchase of common stock

(9,496)

(9,443)

Dividends paid

(286,191)

(265,637)

Payment of long-term debt

(500,000)

(700,000)

Net cash used in financing activities

(1,556,599)

(1,552,141)

Net decrease in cash, cash equivalents, and restricted cash and cash equivalents

(305,049)

(883,169)

Cash, cash equivalents, and restricted cash and cash equivalents:

Beginning of period

4,661,973

4,796,462

End of period

$               4,356,924

$               3,913,293

Reconciliations:

Cash and cash equivalents

$               4,288,124

$               3,847,016

Restricted cash and cash equivalents included in prepaid expenses and other

21,328

17,232

Restricted cash and cash equivalents included in other long-term assets

47,472

49,045

Total cash, cash equivalents, and restricted cash and cash equivalents:

$               4,356,924

$               3,913,293

Supplemental Cash Flow Disclosures

Interest paid

$                    19,839

$                    35,939

Income taxes paid, net

$                  390,056

$                  326,449

Contacts:         William W. Sheehan II                     

Connie Kao

                          Executive Vice President,                

Senior Vice President, Investor Relations

                          Chief Financial Officer                      

(925) 965-4668

                          (925) 965-4150                                

[email protected] 

SOURCE Ross Stores, Inc.

The off-price retailer now forecasts earnings per share of $8.61 to $8.77 for the year as its second-quarter profit and sales gained on higher traffic.

Ross Stores Inc (NASDAQ:ROST) is in focus ahead of its fiscal second-quarter earnings report, due out after the close today.

Ross Stores, Inc. (NASDAQ:ROST) will release its second-quarter earnings report after the closing bell on Thursday, Aug. 20.

Analysts expect the company to report quarterly earnings of $1.94 per share, up from $1.56 per share in the year-ago period. The consensus estimate for ROST’s quarterly revenue is $6.15 billion. It reported $5.53 billion last year, according to Benzinga Pro.

Ahead of quarterly earnings, Evercore ISI Group analyst Michael Binetti maintained an Outperform rating on Ross Stores on Aug. 17 and raised the price target from $265 to $276.

With the recent buzz around Ross Stores, some investors may be eyeing potential gains from the company’s dividends too. As of now, Ross Stores has an annual dividend yield of 0.76%, with a quarterly dividend of 44.5 cents per share ($1.78 per year).  

So, how can investors use its dividend yield to pocket a regular $500 per month?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $791,140 or around 3,371 shares. For a more modest $100 per month or $1,200 per year, you would need $158,181 or around 674 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($1.78 in this case). So, $6,000 / $1.78 = 3,371 ($500 per month), and $1,200 / $1.78 = 674 shares ($100 per month).

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

How that works: The dividend yield is computed by dividing the annual dividend payment by the stock’s current price.

For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).

Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, its yield will also increase, provided the stock price remains unchanged. Conversely, if the dividend payment decreases, so will the yield.

ROST Price Action: Shares of Ross Stores fell 0.7% to close at $234.69 on Wednesday.

Photo via Shutterstock

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

DUBLIN, Calif., Aug. 19, 2026 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) announced today that the Company's Board of Directors declared a regular quarterly cash dividend of $0.445 per common share, payable on September 30, 2026 to stockholders of record as of September 8, 2026.

Investors interested in stocks from the Retail - Discount Stores sector have probably already heard of Target (TGT - Free Report) and Ross Stores (ROST - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Target is sporting a Zacks Rank of #2 (Buy), while Ross Stores has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TGT has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

TGT currently has a forward P/E ratio of 18.40, while ROST has a forward P/E of 31.54. We also note that TGT has a PEG ratio of 2.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ROST currently has a PEG ratio of 2.74.

Another notable valuation metric for TGT is its P/B ratio of 4.28. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ROST has a P/B of 12.48.

These metrics, and several others, help TGT earn a Value grade of B, while ROST has been given a Value grade of D.

TGT has seen stronger estimate revision activity and sports more attractive valuation metrics than ROST, so it seems like value investors will conclude that TGT is the superior option right now.

Wall Street watches a company's quarterly report closely to understand as much as possible about its recent performance and what to expect going forward. Of course, one figure often stands out among the rest: earnings.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

Hunting for 'earnings whispers' or companies poised to beat their quarterly earnings estimates is a somewhat common practice. But that doesn't make it easy. One way that has been proven to work is by using the Zacks Earnings ESP tool.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.

Now that we understand the basic idea, let's look at how the Expected Surprise Prediction works. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a #3 (Hold) ranking, which is most stocks covered at 60%, are expected to perform in-line with the broader market. But stocks that fall into the #2 (Buy) and #1 (Strong Buy) ranking, or the top 15% and top 5% of stocks, respectively, should outperform the market. Strong Buy stocks should outperform more than any other rank.

Should You Consider Ross Stores?The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to quickly look at a qualifying stock. Ross Stores (ROST - Free Report) holds a #3 (Hold) at the moment and its Most Accurate Estimate comes in at $2.00 a share six days away from its upcoming earnings release on August 20, 2026.

ROST has an Earnings ESP figure of +4.03%, which, as explained above, is calculated by taking the percentage difference between the $2.00 Most Accurate Estimate and the Zacks Consensus Estimate of $1.92. Ross Stores is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

ROST is just one of a large group of Retail and Wholesale stocks with a positive ESP figure. Wayfair (W - Free Report) is another qualifying stock you may want to consider.

Wayfair, which is readying to report earnings on October 27, 2026, sits at a Zacks Rank #3 (Hold) right now. Its Most Accurate Estimate is currently $0.83 a share, and W is 74 days out from its next earnings report.

The Zacks Consensus Estimate for Wayfair is $0.81, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of +3.31%.

ROST and W's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

As investors gear up for the next wave of earnings releases, results from major Retail-Wholesale players could play an important role in shaping near-term market momentum. This reporting cycle should provide clearer insight into underlying demand and margin trends across the sector. Performance is likely to have been influenced by consumer sentiment, cautious discretionary spending and retailers’ ability to manage promotional activity, inventory levels and cost pressures amid a still-challenging macroeconomic backdrop.

According to the latest Zacks Earnings Preview, the sector is expected to deliver second-quarter revenue growth of 9.8% year over year, following an equivalent increase in the preceding season. Earnings are expected to rise 8.9% this season, a notable acceleration from 4.1% growth recorded in the previous reporting cycle. The numbers suggest that the sector has maintained solid top-line momentum, while higher earnings point to better operating leverage and margin performance.

Against this backdrop, investor attention is likely to center on retailers with high earnings-beat probability and resilient business models. We have identified four stocks — Target Corporation (TGT - Free Report) , Costco Wholesale Corporation (COST - Free Report) , Dollar General Corporation (DG - Free Report) and Ross Stores, Inc. (ROST - Free Report) — that appear well-positioned to surpass earnings expectations this season.

Key Factors Likely to Have Influenced Retail EarningsThe retail earnings season is likely to reflect a consumer environment that remained resilient, but selective. We note that retail and food-services sales for May and June increased 7.3% and 6.7% year over year, suggesting that underlying demand provided a meaningful top-line tailwind. The FIFA World Cup, which began in June, may also have provided incremental support to categories such as sporting goods, athletic apparel and consumer electronics. As a result, retailers with strong digital platforms, attractive value propositions and exposure to discretionary categories benefiting from event-related demand may have delivered healthier comparable-sales growth.

The consumer backdrop, however, was far from uniformly favorable. Persistent price pressures continued to influence purchasing decisions, particularly among lower- and middle-income households, encouraging trade-down behavior and greater scrutiny of nonessential purchases. This environment is likely to have favored value-oriented retailers, while companies relying on lower-income consumers for larger discretionary purchases may have faced softer demand.

Retailers entered the period facing an unsettled cost environment in which tariffs, freight, sourcing expenses and geopolitical disruptions complicated merchandise planning. Companies with sufficient scale, diversified supply chains, private-label penetration and vendor negotiating leverage were likely better positioned to offset higher product costs. Players that passed increases directly to customers risked weakening unit demand, while those that absorbed them potentially sacrificed margins. Lower energy prices toward the end of the quarter may have provided some relief, but elevated transportation, labor and other operating expenses remained concerns.

Inventory management and operational efficiency are also expected to have emerged as major differentiators. Investments in automation, AI-enabled demand forecasting, merchandising optimization and logistics efficiency may have provided incremental support to operating margins. Retailers leveraging data analytics and supply-chain technology are likely to have benefited from improved inventory turns and lower fulfillment costs. Companies with robust loyalty ecosystems, membership programs and integrated physical-digital capabilities may have continued to gain market share.

4 Retail Stocks Poised for Earnings SurprisesOur research shows that for stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), the chance of a positive earnings surprise is as high as 70%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target: Zacks Rank #2 + Earnings ESP of +5.09%Target’s improving operating momentum, broad-based strength across merchandise categories and channels, and differentiated mix of style, design, convenience and value reinforce the appeal of its retail franchise. The company is sharpening its merchandising authority while investing in store experience, technology and supply-chain capabilities, with encouraging consumer response to assortment innovation across food, wellness, beauty and other priority categories. Meanwhile, growing digital capabilities, same-day fulfillment and high-margin businesses such as Roundel, Target Plus and membership offerings provide additional avenues to deepen engagement and improve the earnings mix.

Target has a Zacks Rank #2 and an Earnings ESP of +5.09%. The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings per share jumped 4 cents to $2.25 over the past seven days, calling for an increase of 9.8% year over year. The consensus estimate for revenues stands at $26.06 billion, which indicates an increase of 3.4% from the year-ago period. TGT has a trailing four-quarter earnings surprise of 8.2%, on average. The company will report numbers on Aug. 19, before the opening bell.

Image Source: Zacks Investment Research

Costco: Zacks Rank #3 + Earnings ESP of +1.45%Costco’s compelling value proposition, strong member loyalty and continued momentum across core merchandising, pharmacy, e-commerce and Kirkland Signature reinforce the strength of its differentiated membership model. The company is investing in warehouse expansion and digital capabilities while improving convenience through faster checkout, same-day delivery and a more seamless omnichannel experience. Costco is also advancing personalization, AI-enabled product discovery and retail media, creating additional opportunities to deepen member engagement and support growth. With its pricing authority, trusted brand and significant runway for domestic and international expansion, Costco remains well-positioned for sustained long-term success.

Costco has a Zacks Rank #3 and an Earnings ESP of +1.45%. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings per share has been stable at $6.51 over the past 30 days, implying an increase of 10.9% from the year-ago period. The consensus estimate for revenues stands at $94.46 billion, which indicates a year-over-year rise of 9.6%. COST has a trailing four-quarter earnings surprise of 1%, on average. The company will report numbers on Sept. 24, after the market closes.

Image Source: Zacks Investment Research

Dollar General: Zacks Rank #3 + Earnings ESP of +1.61%Dollar General’s compelling value proposition, broad store network and growing appeal across income groups continue to strengthen its competitive position, particularly as consumers prioritize affordability and convenience. The company is building on this foundation through stronger nonconsumables merchandising, store renovations, expanding delivery capabilities and digital initiatives designed to deepen customer engagement and loyalty. At the same time, progress in shrink reduction, inventory optimization, supply-chain productivity and category management is supporting better operating efficiency and margin prospects.

Dollar General has a Zacks Rank #3 and an Earnings ESP of +1.61%. The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings per share has been stable at $2.00 over the past 30 days, implying an increase of 7.5% from the year-ago period. The consensus estimate for revenues stands at $11.17 billion, which indicates a year-over-year rise of 4.2%. DG has a trailing four-quarter earnings surprise of 21%, on average. The company will report numbers on Aug. 27, before the market opens.

Image Source: Zacks Investment Research

Ross Stores: Zacks Rank #3 + Earnings ESP of +4.03%Ross Stores is strengthening its competitive position through disciplined execution, compelling branded assortments and a customer-focused transformation strategy that is driving broad-based traffic growth and market share gains. The company continues to enhance its merchandising, marketing and store experience while expanding its footprint and leveraging strong vendor relationships to secure attractive off-price merchandise. Management also sees significant runway from new customer acquisition, particularly among younger shoppers, supported by modernized branding, targeted marketing and ongoing operational improvements.

Ross Stores has a Zacks Rank #3 and an Earnings ESP of +4.03%. The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings per share has risen by a couple of cents to $1.92 over the past 30 days, implying an increase of 23.1% from the year-ago period. The consensus estimate for revenues stands at $6.12 billion, which indicates a year-over-year increase of 10.7%. ROST has a trailing four-quarter earnings surprise of 10.2%, on average. The company will report numbers on Aug. 20, after the closing bell.

Image Source: Zacks Investment Research

E. Ohman J or Asset Management AB lifted its stake in shares of Ross Stores, Inc. (NASDAQ: ROST) by 30.8% during the undefined quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor owned 13,291 shares of the apparel retailer's stock after purchasing an additional 3,130

Posted by Defense World Staff on Aug 7th, 2026

Canandaigua National Bank & Trust Co. acquired a new position in Ross Stores, Inc. (NASDAQ:ROST – Free Report) in the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund acquired 2,916 shares of the apparel retailer’s stock, valued at approximately $621,000.

Other institutional investors and hedge funds have also modified their holdings of the company. State Street Corp boosted its holdings in Ross Stores by 0.7% during the fourth quarter. State Street Corp now owns 13,911,953 shares of the apparel retailer’s stock valued at $2,506,099,000 after acquiring an additional 99,975 shares during the period. Bank of America Corp DE increased its stake in shares of Ross Stores by 20.9% in the second quarter. Bank of America Corp DE now owns 9,582,401 shares of the apparel retailer’s stock worth $1,222,523,000 after purchasing an additional 1,657,008 shares during the period. Morgan Stanley lifted its position in shares of Ross Stores by 1.5% during the 4th quarter. Morgan Stanley now owns 5,436,788 shares of the apparel retailer’s stock worth $979,384,000 after purchasing an additional 79,519 shares during the last quarter. Norges Bank acquired a new position in shares of Ross Stores during the 4th quarter worth about $868,360,000. Finally, Viking Global Investors LP lifted its position in shares of Ross Stores by 9.9% during the 2nd quarter. Viking Global Investors LP now owns 4,747,639 shares of the apparel retailer’s stock worth $605,704,000 after purchasing an additional 426,370 shares during the last quarter. 86.86% of the stock is currently owned by institutional investors and hedge funds.

Ross Stores Trading Up 0.4% Shares of ROST opened at $254.31 on Friday. The stock’s 50-day moving average price is $231.19 and its 200 day moving average price is $217.86. The company has a quick ratio of 0.94, a current ratio of 1.54 and a debt-to-equity ratio of 0.12. The firm has a market capitalization of $81.58 billion, a price-to-earnings ratio of 35.52, a P/E/G ratio of 2.84 and a beta of 0.86. Ross Stores, Inc. has a 12-month low of $143.39 and a 12-month high of $257.00.

Ross Stores (NASDAQ:ROST – Get Free Report) last announced its quarterly earnings data on Thursday, May 21st. The apparel retailer reported $2.02 earnings per share for the quarter, topping the consensus estimate of $1.73 by $0.29. The company had revenue of $6.01 billion for the quarter, compared to analyst estimates of $5.64 billion. Ross Stores had a return on equity of 38.42% and a net margin of 9.74%.Ross Stores’s revenue for the quarter was up 20.6% compared to the same quarter last year. During the same quarter last year, the firm earned $1.47 EPS. Ross Stores has set its FY 2026 guidance at 7.500-7.740 EPS and its Q2 2026 guidance at 1.850-1.930 EPS. As a group, research analysts predict that Ross Stores, Inc. will post 7.74 earnings per share for the current year.

Ross Stores Dividend Announcement The firm also recently announced a quarterly dividend, which was paid on Tuesday, June 30th. Stockholders of record on Tuesday, June 9th were given a dividend of $0.445 per share. This represents a $1.78 annualized dividend and a dividend yield of 0.7%. The ex-dividend date was Tuesday, June 9th. Ross Stores’s payout ratio is 24.86%.

Wall Street Analysts Forecast Growth A number of analysts have issued reports on ROST shares. Deutsche Bank Aktiengesellschaft reaffirmed a “buy” rating and issued a $257.00 target price on shares of Ross Stores in a report on Friday, May 22nd. Zacks Research cut Ross Stores from a “strong-buy” rating to a “hold” rating in a research report on Tuesday. The Goldman Sachs Group restated a “buy” rating and issued a $270.00 price objective on shares of Ross Stores in a research note on Friday, May 22nd. UBS Group reaffirmed a “neutral” rating on shares of Ross Stores in a research report on Wednesday, June 10th. Finally, Wells Fargo & Company cut shares of Ross Stores from an “overweight” rating to an “equal weight” rating and set a $245.00 target price for the company. in a research note on Tuesday, June 23rd. Fifteen research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $239.12.

Check Out Our Latest Report on Ross Stores

Ross Stores Profile (Free Report)

Ross Stores, Inc (NASDAQ: ROST) is an American off‑price retailer headquartered in Dublin, California, that operates the Ross Dress for Less and dd’s DISCOUNTS store formats. The company sells a broad assortment of apparel, footwear, home fashions, accessories and other soft goods, positioning itself as a value-oriented destination for brand‑name and fashion merchandise at reduced prices.

Ross’s business model centers on opportunistic buying of excess inventory, closeouts, cancelled orders and overstocks from manufacturers, department stores and other suppliers.

Featured Stories Five stocks we like better than Ross Stores Sandisk Just Delivered a Blowout Quarter—Here’s Why the Stock Is Falling 4 Oil and Gas ETF Plays as Prices Stay Sky-High What Tesla Stands to Lose If It Walks Away From China Disney Sets Up for a Magical Year in 2027 Want to see what other hedge funds are holding ROST? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Ross Stores, Inc. (NASDAQ:ROST – Free Report).

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Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Ross Stores (ROST - Free Report) , which belongs to the Zacks Retail - Discount Stores industry, could be a great candidate to consider.

This discount retailer has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 12.60%.

For the most recent quarter, Ross Stores was expected to post earnings of $1.7 per share, but it reported $2.02 per share instead, representing a surprise of 18.82%. For the previous quarter, the consensus estimate was $1.88 per share, while it actually produced $2 per share, a surprise of 6.38%.

Price and EPS Surprise

Thanks in part to this history, there has been a favorable change in earnings estimates for Ross Stores lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Ross Stores has an Earnings ESP of +6.03% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner.

With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.