TCF POST Report
Dublin, Calif. — August 20, 2026 Off-price retail giant Ross Stores delivered one of its strongest quarters in years, signalling that budget-conscious shoppers are flocking to discount apparel and footwear racks even as broader retail growth cools elsewhere.
Traffic-Driven Apparel Boom
The parent of Ross Dress for Less and dd’s DISCOUNTS reported second-quarter sales up 13% to $6.3 billion, with comparable store sales climbing a striking 10% — a jump the company attributes primarily to increased customer traffic rather than higher spending per visit. That’s a notable signal for the apparel and footwear sector: shoppers aren’t just spending more, they’re walking through the doors more often, drawn by the promise of discounted clothing and shoes.
CEO Jim Conroy credited the results to the retailer’s merchandise mix, marketing pushes, and store experience upgrades, noting the growth came from both new customers discovering the off-price model and repeat shoppers engaging more deeply — a healthy sign for a business built on constantly refreshed apparel and footwear assortments sourced opportunistically from overproduction and canceled orders across the fashion industry.
Store Expansion Signals Confidence in Off-Price Fashion Model
Ross opened 47 new stores in the quarter — 35 Ross locations and 12 dd’s DISCOUNTS — and is now raising its full-year target to 115 new stores (roughly 90 Ross and 25 dd’s DISCOUNTS). That expansion pace underscores continued confidence that the treasure-hunt, discount-apparel format still has room to grow, even as e-commerce and fast fashion compete for the same value-seeking consumer.
Tariffs Cut Both Ways for Apparel Retailers
A notable footnote for the fashion supply chain: roughly $253 million of the quarter’s operating profit came from IEEPA tariff refunds, boosting earnings per share by about $0.60. Apparel and footwear importers have been especially exposed to tariff volatility, and this refund highlights how tariff policy swings can materially move the bottom line for off-price retailers who source heavily from overseas garment and shoe manufacturers. Even excluding that one-time benefit, operating margin still improved 205 basis points — beating the company’s own plan — suggesting the core apparel business is genuinely strengthening, not just benefiting from a one-off tax event.
Looking Ahead to Fall and Holiday
Despite tougher year-over-year comparisons, Ross raised guidance for the back half of the year: comparable sales are now expected to rise 6-7% in Q3 and 4-5% in Q4, spanning the critical fall fashion and holiday footwear shopping seasons. Full-year EPS guidance was lifted to $8.61-$8.77.
What Fashion Retailers to Watch
At a moment when many apparel retailers are grappling with cautious consumers and tariff-driven cost pressure, Ross’s results suggest the off-price channel is capturing share — both from shoppers trading down from full-price fashion retailers and from the resilience of a business model built to absorb apparel oversupply industry-wide.
