Ross Stores Surges on Strong Q4 Earnings and Inventory Management

Ross Stores (ROST) delivered a robust fourth-quarter performance, posting $2.9 billion in revenue, a 7.2% year-over-year increase. The growth was supported by a 9.3% rise in same-store sales, reflecting stronger customer traffic and elevated conversion rates. The retailer achieved a 21.8% gross margin, up from 21.1% in the prior-year quarter, due to optimized markdowns and improved inventory velocity. The company’s inventory management strategy played a critical role, with inventory levels decreasing by 4.6% despite higher sales volume. This reduction, coupled with a 17% improvement in inventory turnover, helped free up working capital and contributed to a 14.5% increase in operating income. Management attributed the efficiency gains to enhanced supply chain coordination and more accurate demand forecasting. Ross also lifted its 2026 full-year outlook, projecting revenue growth of 5.5% to 6.0% and adjusted earnings per share between $4.65 and $4.75. Analysts noted that the guidance reflects confidence in sustained consumer spending, particularly on value-oriented apparel and home goods. The company’s stock rose 3.8% in after-hours trading on the strength of the results. The performance underscores Ross's ability to maintain margin resilience amid macroeconomic uncertainty. With 1,700 stores in operation and a growing digital footprint, the retailer is leveraging its omnichannel capabilities to capture cross-channel shoppers. The focus on value-driven offerings continues to differentiate Ross in a competitive retail landscape.