Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Earnings


	Three Months Ended				Six Months Ended
($000, except per share data, unaudited)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Sales	$	5,529,152	$	5,287,519	$	10,514,123	$	10,145,586

Costs and Expenses
Cost of goods sold	4,002,167		3,791,929		7,583,533		7,282,601
Selling, general and administrative	888,711		836,357		1,685,846		1,612,639

Operating income	638,274		659,233		1,244,744		1,250,346
Interest income, net	(32,346)		(43,350)		(66,755)		(89,300)


Earnings before taxes	670,620		702,583		1,311,499		1,339,646
Provision for taxes on earnings	162,625		175,435		324,255		324,508
Net earnings	$	507,995	$	527,148	$	987,244	$	1,015,138

Earnings per share
Basic	$	1.57	$	1.60	$	3.05	$	3.07
Diluted	$	1.56	$	1.59	$	3.03	$	3.05


Weighted-average shares outstanding (000)
Basic	323,000		329,392		323,938		330,325
Diluted	324,796		331,511		325,909		332,620

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended				Six Months Ended
($000, unaudited)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Net earnings	$	507,995	$	527,148	$	987,244	$	1,015,138

Other comprehensive income	—		—		—		—

Comprehensive income	$	507,995	$	527,148	$	987,244	$	1,015,138

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Balance Sheets


($000, except share data, unaudited)	August 2, 2025		February 1, 2025		August 3, 2024
Assets
Current Assets
Cash and cash equivalents	$	3,847,016	$	4,730,744	$	4,668,137

Accounts receivable	210,520		144,482		181,918
Merchandise inventory	2,608,485		2,444,513		2,490,558
Prepaid expenses and other	259,815		218,957		254,370

Total current assets	6,925,836		7,538,696		7,594,983

Property and Equipment
Land and buildings	1,821,855		1,493,496		1,486,214
Fixtures and equipment	4,883,392		4,521,044		4,341,764
Leasehold improvements	1,727,314		1,701,340		1,607,226
Construction-in-progress	394,493		807,256		694,574
	8,827,054		8,523,136		8,129,778
Less accumulated depreciation and amortization	4,920,714		4,730,733		4,546,243
Property and equipment, net	3,906,340		3,792,403		3,583,535

Operating lease assets	3,374,582		3,294,858		3,234,180
Other long-term assets	288,761		279,375		265,323
Total assets	$	14,495,519	$	14,905,332	$	14,678,021

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	2,205,613	$	2,126,317	$	2,217,227
Accrued expenses and other	655,218		626,490		639,703
Current operating lease liabilities	716,162		703,337		691,036
Accrued payroll and benefits	315,893		462,284		353,980
Income taxes payable	—		43,666		23,266

Current portion of long-term debt	499,122		699,731		949,028
Total current liabilities	4,392,008		4,661,825		4,874,240

Long-term debt	1,017,218		1,515,080		1,513,826
Non-current operating lease liabilities	2,835,481		2,764,281		2,710,239
Other long-term liabilities	279,258		267,911		254,487
Deferred income taxes	238,985		187,040		194,697

Commitments and contingencies

Stockholders’ Equity
Common stock, par value $.01 per share Authorized 1,000,000,000 shares Issued and outstanding 325,531,000, 328,813,000 and 332,075,000 shares, respectively	3,255		3,288		3,321
Additional paid-in capital	2,170,734		2,097,110		2,024,822
Treasury stock	(783,830)		(719,410)		(705,046)

Retained earnings	4,342,410		4,128,207		3,807,435
Total stockholders’ equity	5,732,569		5,509,195		5,130,532
Total liabilities and stockholders’ equity	$	14,495,519	$	14,905,332	$	14,678,021

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity


	Six Months Ended August 2, 2025

	Common stock			Additional paid-in capital		Treasury stock			Retained earnings
($ and shares in 000, except per share data, unaudited)	Shares	Amount						Total
Balance at February 1, 2025	328,813	$	3,288	$	2,097,110	$	(719,410)		$	4,128,207	$	5,509,195
Net earnings	—	—		—		—			479,249		479,249

Common stock issued under stock plans, net of shares used for tax withholding	551	6		6,137		(60,131)			—		(53,988)
Stock-based compensation	—	—		39,296		—			—		39,296
Common stock repurchased, inclusive of excise tax	(1,980)	(20)		(11,010)		—			(253,344)		(264,374)
Dividends declared ($0.4050 per share)	—	—		—		—			(133,300)		(133,300)
Balance at May 3, 2025	327,384	$	3,274	$	2,131,533	$	(779,541)		$	4,220,812	$	5,576,078
Net earnings	—	—		—		—			507,995		507,995
Common stock issued under stock plans, net of shares used for tax withholding	75	1		6,236		(4,289)			—		1,948
Stock-based compensation	—	—		43,943		—			—		43,943
Common stock repurchased, inclusive of excise tax	(1,928)	(20)		(10,978)		—			(254,060)		(265,058)
Dividends declared ($0.4050 per share)	—	—		—		—			(132,337)		(132,337)
Balance at August 2, 2025	325,531	$	3,255	$	2,170,734	$	(783,830)		$	4,342,410	$	5,732,569


	Six Months Ended August 3, 2024

	Common stock			Additional paid-in capital		Treasury stock			Retained earnings
($ and shares in 000, except per share data, unaudited)	Shares	Amount						Total
Balance at February 3, 2024	335,172	$	3,352	$	1,952,625	$	(633,318)		$	3,548,667	$	4,871,326
Net earnings	—	—		—		—			487,990		487,990
Common stock issued under stock plans, net of shares used for tax withholding	642	6		6,218		(70,480)			—		(64,256)
Stock-based compensation	—	—		40,447		—			—		40,447
Common stock repurchased, inclusive of excise tax	(1,892)	(19)		(9,368)		—			(254,870)		(264,257)
Dividends declared ($0.3675 per share)	—	—		—		—			(123,298)		(123,298)
Balance at May 4, 2024	333,922	$	3,339	$	1,989,922	$	(703,798)		$	3,658,489	$	4,947,952
Net earnings	—	—		—		—			527,148		527,148
Common stock issued under stock plans, net of shares used for tax withholding	(7)	—		6,194		(1,248)			—		4,946
Stock-based compensation	—	—		38,021		—			—		38,021
Common stock repurchased, inclusive of excise tax	(1,840)	(18)		(9,315)		—			(255,749)		(265,082)
Dividends declared ($0.3675 per share)	—	—		—		—			(122,453)		(122,453)
Balance at August 3, 2024	332,075	$	3,321	$	2,024,822	$	(705,046)		$	3,807,435	$	5,130,532












The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows


	Six Months Ended
($000, unaudited)	August 2, 2025		August 3, 2024
Cash Flows From Operating Activities
Net earnings	$	987,244	$	1,015,138
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	242,337		217,781

Stock-based compensation	83,239		78,468
Deferred income taxes	51,945		(1,541)


Change in assets and liabilities:
Merchandise inventory	(163,972)		(298,338)
Other current assets	(92,049)		(81,363)
Accounts payable	101,937		271,582
Other current liabilities	(83,135)		(197,585)
Income taxes	(54,139)		(46,708)
Operating lease assets and liabilities, net	4,301		6,962
Other long-term, net	369		(3,354)
Net cash provided by operating activities	1,078,077		961,042

Cash Flows From Investing Activities
Additions to property and equipment	(409,105)		(333,735)


Net cash used in investing activities	(409,105)		(333,735)

Cash Flows From Financing Activities
Issuance of common stock related to stock plans	12,380		12,418
Treasury stock purchased	(64,420)		(71,728)
Repurchase of common stock	(525,021)		(524,979)
Excise tax paid on repurchase of common stock	(9,443)		—
Dividends paid	(265,637)		(245,751)



Payment of long-term debt	(700,000)		—

Net cash used in financing activities	(1,552,141)		(830,040)

Net decrease in cash, cash equivalents, and restricted cash and cash equivalents	(883,169)		(202,733)

Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period	4,796,462		4,935,441
End of period	$	3,913,293	$	4,732,708

Supplemental Cash Flow Disclosures
Interest paid	$	35,939	$	40,158
Income taxes paid, net	$	326,449	$	372,756

The accompanying notes are an integral part of these condensed consolidated financial statements.

Notes to Condensed Consolidated Financial Statements

Three and Six Months Ended August 2, 2025 and August 3, 2024

(Unaudited)

Note A: Summary of Significant Accounting Policies

Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of August 2, 2025 and August 3, 2024, and the results of operations, comprehensive income, and stockholders’ equity for the three and six month periods ended August 2, 2025 and August 3, 2024, and the cash flows for the six month periods ended August 2, 2025 and August 3, 2024. The Condensed Consolidated Balance Sheet as of February 1, 2025, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended.

Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended February 1, 2025.

The results of operations, comprehensive income, and stockholders’ equity for the three and six month periods ended August 2, 2025 and August 3, 2024, and the cash flows for the six month periods ended August 2, 2025 and August 3, 2024 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. The fiscal years ending January 31, 2026 and February 1, 2025 are referred to as fiscal 2025 and fiscal 2024, respectively, and are both 52-week years. The three month periods ended August 2, 2025 and August 3, 2024 are referred to as the second quarter of fiscal 2025 and fiscal 2024, respectively.

Use of accounting estimates. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the Company’s estimates. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, and legal claims.

Segment reporting. The Company has one reportable segment. Refer to Note G: Segment Reporting for additional information.

Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less. The institutions where these instruments are held could potentially subject the Company to concentrations of credit risk. The Company manages its risk associated with these instruments by primarily holding its cash and cash equivalents across a highly diversified set of banks and other financial institutions.

Restricted cash and cash equivalents. Restricted cash and cash equivalents serve as collateral for certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, and U.S. Government and agency securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations.

The Company uses standby letters of credit in addition to a funded trust to collateralize certain insurance obligations. The standby letters of credit are collateralized by restricted cash. As of August 2, 2025, February 1, 2025, and August 3, 2024, the Company had $1.0 million, $1.8 million, and $2.2 million, respectively, in standby letters of credit outstanding. As of August 2, 2025, February 1, 2025, and August 3, 2024, the Company had $65.3 million, $63.9 million, and $62.4 million, respectively, in a collateral trust.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets, that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:


($000)	August 2, 2025		February 1, 2025		August 3, 2024
Cash and cash equivalents	$	3,847,016	$	4,730,744	$	4,668,137
Restricted cash and cash equivalents included in:
Prepaid expenses and other	17,232		17,087		14,851
Other long-term assets	49,045		48,631		49,720
Total restricted cash and cash equivalents	66,277		65,718		64,571
Total cash, cash equivalents, and restricted cash and cash equivalents	$	3,913,293	$	4,796,462	$	4,732,708

Property and equipment. As of August 2, 2025 and August 3, 2024, the Company had $32.7 million and $33.9 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and equipment, Accounts payable, and Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets. Depreciation and amortization expense on property and equipment for the three and six month periods ended August 2, 2025 and August 3, 2024 were as follows:


	Three Months Ended				Six Months Ended
($000)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Depreciation and amortization expense	$	126,399	$	108,595	$	242,337	$	217,781

Operating leases. Operating lease assets obtained in exchange for operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) for the six month periods ended August 2, 2025 and August 3, 2024 were $427.4 million and $440.6 million, respectively.

Supply chain finance program. The Company facilitates a voluntary supply chain finance program (“SCF program”) to provide certain suppliers with the opportunity to sell their receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. A third-party financial institution administers the SCF program. The Company’s responsibility is limited to making payments on the terms originally negotiated with each supplier, regardless of whether a supplier sells its receivable to a financial institution. The Company is not a party to the agreements between the participating financial institutions and the suppliers in connection with the SCF program, and does not receive financial incentives from the suppliers or the financial institutions. The Company does not provide guarantees under the SCF program, and the Company’s rights and obligations to its suppliers are not affected by the SCF program. The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the SCF program.

All outstanding payments owed under the SCF program are recorded within Accounts payable in the Condensed Consolidated Balance Sheets. The Company accounts for all payments made under the SCF program as a reduction to operating cash flows in Accounts payable within the Condensed Consolidated Statements of Cash Flows. The amounts owed to participating financial institutions under the SCF program and included in Accounts payable were $186.8 million, $159.2 million, and $182.5 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

Cash dividends. On August 20, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.4050 per common share, payable on September 30, 2025. The Company’s Board of Directors declared a quarterly cash dividend of $0.4050 per common share in March and May 2025, and $0.3675 per common share in March, May, August, and November 2024.

Stock repurchases. In March 2024, the Company’s Board of Directors approved a two-year stock repurchase program to repurchase up to $2.1 billion of the Company’s common stock through fiscal 2025. During the six month period ended August 2, 2025, the Company repurchased 3.9 million shares of common stock for $525.0 million (excluding excise tax) under this program. As of August 2, 2025, there was $525.0 million available for repurchase under this program. During the six month period ended August 3, 2024, the Company repurchased 3.7 million shares of common stock for $525.0 million (excluding excise tax) under this program.

Stock repurchased for tax withholding is considered treasury stock which is available for reissuance. During the three and six month periods ended August 2, 2025, shares purchased by the Company for tax withholding totaled 32,000 and 518,000, respectively. During the three and six month periods ended August 3, 2024, shares purchased by the Company for tax withholding totaled 9,000 and 494,000, respectively.

Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violations by the Company of wage and hour laws. Class/representative action litigation remains pending as of August 2, 2025.

The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company may include commercial, product and product safety, consumer, intellectual property, environmental, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, and/or local laws. Actions against the Company are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties.

In the opinion of management, the resolution of currently pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and six month periods ended August 2, 2025 and August 3, 2024:


	Three Months Ended				Six Months Ended
	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Home Accents and Bed and Bath	23	%	24	%	24	%	25	%
Ladies	23	%	23	%	23	%	23	%
Men’s	17	%	17	%	16	%	16	%
Accessories, Lingerie, Fine Jewelry, and Cosmetics	15	%	14	%	15	%	14	%
Shoes	13	%	13	%	13	%	13	%
Children’s	9	%	9	%	9	%	9	%
Total	100	%	100	%	100	%	100	%

Interest income, net. The table below shows the components of interest income, net for the three and six month periods ended August 2, 2025 and August 3, 2024:


	Three Months Ended				Six Months Ended
($000)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Interest income	$	(40,326)	$	(60,282)	$	(87,194)	$	(123,500)
Capitalized interest	(2,963)		(4,577)		(8,367)		(8,842)
Other interest expense	392		367		792		725
Interest expense on long-term debt	10,551		21,142		28,014		42,317
Interest income, net	$	(32,346)	$	(43,350)	$	(66,755)	$	(89,300)

Recently issued accounting standards. In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. It requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation and the amount of income taxes paid as well as additional income tax related amounts. The new guidance is effective for annual reporting periods beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

Note B: Fair Value Measurements

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The inputs used to measure fair value include: Level 1, observable inputs such as quoted prices in active markets; Level 2, inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, unobservable inputs in which little or no market data exists. This fair value hierarchy requires the Company to develop its own assumptions, maximize the use of observable inputs, and minimize the use of unobservable inputs when measuring fair value. Corporate and U.S. government and agency securities are classified within Level 1 because these securities are valued using quoted market prices.

The fair value of the Company’s financial instruments are as follows:


($000)	August 2, 2025		February 1, 2025		August 3, 2024
Cash and cash equivalents (Level 1)	$	3,847,016	$	4,730,744	$	4,668,137
Restricted cash and cash equivalents (Level 1)	$	66,277	$	65,718	$	64,571

The underlying assets in the Company’s nonqualified deferred compensation program as of August 2, 2025, February 1, 2025, and August 3, 2024 (included in Other long-term assets and in Other long-term liabilities) primarily consist of participant-directed money market, stock, and bond funds. The fair value measurement for funds with quoted market prices in active markets (Level 1) are as follows:


($000)	August 2, 2025		February 1, 2025		August 3, 2024
Nonqualified deferred compensation program (Level 1)	$	204,363	$	196,786	$	181,855

Note C: Stock-Based Compensation

Restricted stock awards. The Company grants shares of restricted stock or restricted stock units to directors, officers, and key employees. The fair value of shares of restricted stock and restricted stock units at the date of grant is amortized to expense over the vesting period of generally three to five years.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of a performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally three years from the date the performance award was granted.

In fiscal 2024, the Company granted a performance-conditioned restricted stock unit award (“PRSU”) in connection with the hiring of its current Chief Executive Officer. The PRSU is subject to vesting based on both service and market-based conditions, over a period that ends in March 2029.

Restricted stock awards and performance awards (including the PRSU) are collectively referred to as stock awards.

A summary of stock awards activity for the six month period ended August 2, 2025, is presented below:


	Number of shares (000)	Weighted-average grant date fair value
Unvested at February 1, 2025	4,157	$	117.02
Awarded	1,025	136.66
Released	(1,190)	111.40
Forfeited	(85)	119.27
Unvested at August 2, 2025	3,907	$	123.84

The 51,164 PRSU shares awarded in fiscal 2024 all remain unvested as of August 2, 2025. The weighted-average grant date fair value of the PRSU shares was $135.83.

The unamortized stock awards compensation expense at August 2, 2025 was $278.2 million, which is expected to be recognized over a weighted-average remaining period of 1.9 years. The unamortized stock award compensation expense at August 3, 2024 was $235.7 million, which was expected to be recognized over a weighted-average remaining period of 1.9 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value withheld to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.

For the three and six month periods ended August 2, 2025 and August 3, 2024, the Company recognized stock-based compensation expense as follows:


	Three Months Ended				Six Months Ended
($000)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Restricted stock	$	27,200	$	21,676	$	53,549	$	44,910
Performance awards	15,643		15,252		27,505		31,366
Employee stock purchase plan	1,100		1,093		2,185		2,192
Total	$	43,943	$	38,021	$	83,239	$	78,468

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and six month periods ended August 2, 2025 and August 3, 2024 is as follows:


	Three Months Ended				Six Months Ended
Statements of Earnings Classification ($000)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Cost of goods sold	$	18,660	$	17,066	$	36,263	$	36,691
Selling, general and administrative	25,283		20,955		46,976		41,777
Total	$	43,943	$	38,021	$	83,239	$	78,468

The tax benefits related to stock-based compensation expense for the three and six month periods ended August 2, 2025 were $7.2 million and $13.8 million, respectively. The tax benefits related to stock-based compensation expense for the three and six month periods ended August 3, 2024 were $7.1 million and $15.0 million, respectively.

Note D: Earnings Per Share

The Company computes and reports both basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units.

Shares are excluded from the calculation of diluted EPS if their effect would have been anti-dilutive to the calculation of diluted EPS. For the three and six month periods ended August 2, 2025, approximately 28,000 and 57,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively. For the three and six month periods ended August 3, 2024, approximately 2,000 and 3,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively.

The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:


	Three Months Ended						Six Months Ended
Shares in (000s)	Basic EPS		Effect of dilutive common stock equivalents		Diluted EPS		Basic EPS		Effect of dilutive common stock equivalents		Diluted EPS
August 2, 2025
Shares	323,000		1,796		324,796		323,938		1,971		325,909
Amount	$	1.57	$	(0.01)	$	1.56	$	3.05	$	(0.02)	$	3.03

August 3, 2024
Shares	329,392		2,119		331,511		330,325		2,295		332,620
Amount	$	1.60	$	(0.01)	$	1.59	$	3.07	$	(0.02)	$	3.05

Note E: Debt

Senior Notes. Unsecured senior debt (the “Senior Notes”), net of unamortized discounts and debt issuance costs, consisted of the following:


($000)	August 2, 2025		February 1, 2025		August 3, 2024





3.375% Senior Notes due 2024	$	—	$	—	$	249,943
4.600% Senior Notes due 2025	—		699,731		699,085
0.875% Senior Notes due 2026	499,122		498,503		497,885
4.700% Senior Notes due 2027	241,003		240,778		240,555
4.800% Senior Notes due 2030	133,043		132,953		132,864
1.875% Senior Notes due 2031	496,676		496,390		496,105
5.450% Senior Notes due 2050	146,496		146,456		146,417
Total long-term debt1	$	1,516,340	$	2,214,811	$	2,462,854

Less: current portion	$	499,122	$	699,731	$	949,028
Total due beyond one year	$	1,017,218	$	1,515,080	$	1,513,826

1 Net of unamortized discounts and debt issuance costs of $8.7 million, $10.2 million, and $12.1 million as of August 2, 2025, February 1, 2025, and August 3, 2024, respectively.

Interest on all Senior Notes is payable semi-annually and the Senior Notes are subject to prepayment penalties for early payment of principal.

In April 2025, the Company repaid at maturity the $700 million principal amount of the 4.600% Senior Notes.

The aggregate fair value of the remaining five outstanding series of Senior Notes was approximately $1.4 billion as of August 2, 2025. The aggregate fair value of the six then outstanding series of Senior Notes was approximately $2.1 billion as of February 1, 2025. The aggregate fair value of the seven then outstanding series of Senior Notes was approximately $2.4 billion as of August 3, 2024. The fair value is estimated by obtaining comparable market quotes, which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance.

Revolving credit facilities. In June 2025, the Company entered into a new, $1.3 billion senior unsecured revolving credit facility (the “2025 Credit Facility”), which replaced its previous $1.3 billion unsecured credit facility. The 2025 Credit Facility expires in June 2030 and may be extended at the Company’s request for up to two additional one-year periods subject to customary conditions. The 2025 Credit Facility contains a $300 million sublimit for issuance of standby letters of credit. It also contains an option allowing the Company to increase the size of its Credit Facility by up to an additional $700 million, with the agreement of the committing lenders. Interest on borrowings under this Credit Facility is a term rate based on the Secured Overnight Financing Rate (“Term SOFR”) (or an alternate benchmark rate, if Term SOFR is no longer available) plus an applicable margin, and is payable quarterly and upon maturity.

The 2025 Credit Facility is subject to a quarterly Consolidated Adjusted Debt to Consolidated EBITDAR financial leverage ratio covenant. As of August 2, 2025, the Company was in compliance with the financial covenant, had no borrowings or standby letters of credit outstanding under the Credit Facility, and the $1.3 billion Credit Facility remained in place and available.

Note F: Taxes on Earnings

The Company’s 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. The Company’s effective tax rates for the three month periods ended August 2, 2025 and August 3, 2024 were approximately 24% and 25%, respectively. The one percent decrease in the effective tax rate for the three month period ended August 2, 2025 compared to the three month period ended August 3, 2024 was primarily due to the resolution of tax positions with various tax authorities. The Company’s effective tax rates for the six month periods ended August 2, 2025 and August 3, 2024 were approximately 25% and 24%, respectively. The one percent increase in the effective tax rate for the six month period ended August 2, 2025 compared to the six month period ended August 3, 2024 was primarily due to the tax effects associated with stock-based compensation.

As of August 2, 2025, February 1, 2025, and August 3, 2024, the reserves for unrecognized tax benefits were $66.5 million, $62.2 million, and $63.2 million, inclusive of $8.9 million, $7.9 million, and $8.0 million of related interest and penalties, respectively. The Company accounts for interest and penalties related to unrecognized tax benefits as a part of its provision for taxes on earnings. If recognized, $52.8 million would impact the Company’s effective tax rate. It is reasonably possible that certain federal and state tax matters may be concluded or statutes of limitations may lapse during the next 12 months. Accordingly, the total amount of unrecognized tax benefits may decrease by up to $9.7 million. The difference between the total amount of unrecognized tax benefits and the amounts that would impact the effective tax rate relates to amounts attributable to deferred income tax assets and liabilities. These amounts are net of federal and state income taxes.

The Company is open to audit by the Internal Revenue Service under the statute of limitations for fiscal years 2021 through 2024. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2020 through 2024. Certain state tax returns are currently under audit by various tax authorities. The Company does not expect the results of these audits to have a material impact on the condensed consolidated financial statements.

In July 2025, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14.”, also known as “One Big Beautiful Bill Act” (“OBBBA”), was signed into law. The OBBBA made several changes to business tax provisions including the reinstatement of 100% bonus depreciation and immediate expensing of domestic research and development expenditures. As of August 2, 2025, the OBBBA resulted in an increase to the Company’s deferred tax liability balance of approximately $30 million primarily due to the reinstatement of 100% bonus depreciation.

Note G: Segment Reporting

The Company has two operating segments: Ross and dd’s DISCOUNTS. Each operating segment’s operations include only activities related to off-price retailing in stores throughout the United States and its territories. The Company determined that the two operating segments share similar economic and other qualitative characteristics and are therefore aggregated into one reportable segment.

The Company considers operating income, defined as earnings before interest and taxes, to be the measure of profit or loss for its reportable segment. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as Total assets. Segment information is prepared on the same basis that the Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), manages the segments. The CODM uses operating income to monitor budget versus actual results, make key operating decisions, perform competitive analysis to the Company’s peers, and make resource allocation decisions.

The financial information below, including the significant expense categories regularly provided to the CODM, is presented for the Company’s reportable segment for the three and six month periods ended August 2, 2025 and August 3, 2024:


	Three Months Ended				Six Months Ended
($000)	August 2, 2025		August 3, 2024		August 2, 2025		August 3, 2024
Sales	$	5,529,152	$	5,287,519	$	10,514,123	$	10,145,586

Costs and Expenses1
Cost of goods sold, excluding occupancy costs2	3,669,114		3,477,186		6,923,765		6,657,652
Occupancy costs	333,053		314,743		659,768		624,949
Store related costs3	752,101		715,869		1,429,515		1,370,337
Other segment items4	136,610		120,488		256,331		242,302
Segment operating income	638,274		659,233		1,244,744		1,250,346
Interest income, net5	(32,346)		(43,350)		(66,755)		(89,300)
Earnings before taxes	$	670,620	$	702,583	$	1,311,499	$	1,339,646

1 Refer to Note A: Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements for depreciation and amortization expense.
2 Cost of goods sold, excluding occupancy costs primarily includes merchandise related costs, distribution costs, freight costs, and buying costs.
3 Store related costs primarily includes store payroll, other store operating expenses, and advertising costs.
4 Other segment items included in Segment operating income primarily includes other general and administrative expenses.
5 Refer to Note A: Summary of Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements for disclosure of the components of Interest income, net.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Ross Stores, Inc.:

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheets of Ross Stores, Inc. and subsidiaries (the “Company”) as of August 2, 2025 and August 3, 2024, the related condensed consolidated statements of earnings, comprehensive income, and stockholders’ equity, for the three and six month periods ended August 2, 2025 and August 3, 2024, and cash flows for the six month periods ended August 2, 2025 and August 3, 2024, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of February 1, 2025, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 31, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of February 1, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

San Francisco, California

September 9, 2025

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