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 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

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 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Net earnings	$	851,299	$	507,995	$	1,501,263	$	987,244

Other comprehensive income	—		—		—		—

Comprehensive income	$	851,299	$	507,995	$	1,501,263	$	987,244

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

Condensed Consolidated Balance Sheets


($000, except share data, unaudited)	August 1, 2026		January 31, 2026		August 2, 2025
Assets
Current Assets
Cash and cash equivalents	$	4,288,124	$	4,594,392	$	3,847,016

Accounts receivable	248,140		181,301		210,520
Merchandise inventory	3,087,370		2,630,970		2,608,485
Prepaid expenses and other	252,726		233,434		259,815

Total current assets	7,876,360		7,640,097		6,925,836

Property and Equipment
Land and buildings	1,838,383		1,836,167		1,821,855
Fixtures and equipment	5,310,383		5,056,827		4,883,392
Leasehold improvements	1,900,782		1,861,160		1,727,314
Construction-in-progress	558,837		477,290		394,493
	9,608,385		9,231,444		8,827,054
Less accumulated depreciation and amortization	5,350,579		5,142,684		4,920,714
Property and equipment, net	4,257,806		4,088,760		3,906,340

Operating lease assets	3,545,351		3,519,610		3,374,582
Other long-term assets	302,763		300,270		288,761
Total assets	$	15,982,280	$	15,548,737	$	14,495,519

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	2,621,740	$	2,386,418	$	2,205,613
Accrued expenses and other	744,284		666,978		655,218
Current operating lease liabilities	752,302		727,855		716,162
Accrued payroll and benefits	440,837		484,407		315,893
Income taxes payable	84,916		61,779		—

Current portion of long-term debt	241,459		499,743		499,122
Total current liabilities	4,885,538		4,827,180		4,392,008

Long-term debt	777,053		1,017,863		1,017,218
Non-current operating lease liabilities	2,968,337		2,966,877		2,835,481
Other long-term liabilities	295,611		287,947		279,258
Deferred income taxes	312,557		261,427		238,985

Commitments and contingencies

Stockholders’ Equity
Common stock, par value $.01 per share Authorized 1,000,000,000 shares Issued and outstanding 319,668,000, 322,333,000 and 325,531,000 shares, respectively	3,197		3,223		3,255
Additional paid-in capital	2,359,505		2,257,354		2,170,734
Treasury stock	(935,883)		(799,288)		(783,830)

Retained earnings	5,316,365		4,726,154		4,342,410
Total stockholders’ equity	6,743,184		6,187,443		5,732,569
Total liabilities and stockholders’ equity	$	15,982,280	$	15,548,737	$	14,495,519

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

Condensed Consolidated Statements of Stockholders’ Equity


	Six Months Ended August 1, 2026

	Common stock			Additional paid-in capital		Treasury stock			Retained earnings
($ and shares in 000, except per share data, unaudited)	Shares	Amount						Total
Balance at January 31, 2026	322,333	$	3,223	$	2,257,354	$	(799,288)		$	4,726,154	$	6,187,443
Net earnings	—	—		—		—			649,964		649,964
Common stock issued under stock plans, net of shares used for tax withholding	156	2		6,614		(134,171)			—		(127,555)
Stock-based compensation	—	—		59,120		—			—		59,120
Common stock repurchased, inclusive of excise tax	(1,454)	(15)		(8,786)		—			(311,609)		(320,410)
Dividends declared ($0.4450 per share)	—	—		—		—			(143,559)		(143,559)
Balance at May 2, 2026	321,035	$	3,210	$	2,314,302	$	(933,459)		$	4,920,950	$	6,305,003
Net earnings	—	—		—		—			851,299		851,299
Common stock issued under stock plans, net of shares used for tax withholding	32	1		6,566		(2,424)			—		4,143
Stock-based compensation	—	—		47,257		—			—		47,257
Common stock repurchased, inclusive of excise tax	(1,399)	(14)		(8,620)		—			(313,252)		(321,886)
Dividends declared ($0.4450 per share)	—	—		—		—			(142,632)		(142,632)
Balance at August 1, 2026	319,668	$	3,197	$	2,359,505	$	(935,883)		$	5,316,365	$	6,743,184

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


	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

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 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

Supplemental Cash Flow Disclosures
Interest paid	$	19,839	$	35,939
Income taxes paid, net	$	390,056	$	326,449

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 1, 2026 and August 2, 2025

(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 1, 2026 and August 2, 2025, and the results of operations, comprehensive income, and stockholders’ equity for the three and six month periods ended August 1, 2026 and August 2, 2025, and the cash flows for the six month periods ended August 1, 2026 and August 2, 2025. The Condensed Consolidated Balance Sheet as of January 31, 2026, 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 January 31, 2026.

The results of operations, comprehensive income, and stockholders’ equity for the three and six month periods ended August 1, 2026 and August 2, 2025, and the cash flows for the six month periods ended August 1, 2026 and August 2, 2025 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. The fiscal years ending January 30, 2027 and January 31, 2026 are referred to as fiscal 2026 and fiscal 2025, respectively, and are both 52-week years. The three month periods ended August 1, 2026 and August 2, 2025 are referred to as the second quarter of fiscal 2026 and fiscal 2025, 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 primarily by 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 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 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 1, 2026		January 31, 2026		August 2, 2025
Cash and cash equivalents	$	4,288,124	$	4,594,392	$	3,847,016
Restricted cash and cash equivalents included in:
Prepaid expenses and other	21,328		20,950		17,232
Other long-term assets	47,472		46,631		49,045
Total restricted cash and cash equivalents	68,800		67,581		66,277
Total cash, cash equivalents, and restricted cash and cash equivalents	$	4,356,924	$	4,661,973	$	3,913,293

Property and equipment. As of August 1, 2026 and August 2, 2025, the Company had $53.8 million and $32.7 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. The Company capitalizes interest during the construction period of facilities and during the development and implementation phase of software projects.

Depreciation and amortization expense on property and equipment for the three and six month periods ended August 1, 2026 and August 2, 2025 were as follows:


	Three Months Ended				Six Months Ended
($000)	August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Depreciation and amortization expense	$	140,191	$	126,399	$	272,790	$	242,337

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 1, 2026 and August 2, 2025 were $384.5 million and $427.4 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 the Company 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 $230.1 million, $208.2 million, and $186.8 million as of August 1, 2026, January 31, 2026, and August 2, 2025, respectively.

Cash dividends. On August 19, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.4450 per common share, payable on September 30, 2026. The Company’s Board of Directors declared quarterly cash dividends of $0.4450 per common share in March and May 2026, and $0.4050 per common share in March, May, August, and November 2025.

Stock repurchases. In March 2026, the Company’s Board of Directors approved a new, two-year stock repurchase program to repurchase up to $2.55 billion of the Company’s common stock through January 29, 2028. During the six month period ended August 1, 2026, the Company repurchased 2.9 million shares of common stock for $637.5 million (excluding excise tax) under this program. As of August 1, 2026, there was $1.9 billion available for future repurchases under this program. 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 the previous publicly announced repurchase program.

Stock purchased for tax withholding is considered treasury stock which is available for reissuance. During the three and six month periods ended August 1, 2026, stock purchased by the Company for tax withholding totaled 10,000 and 644,000 shares, respectively. During the three and six month periods ended August 2, 2025, stock purchased by the Company for tax withholding totaled 32,000 shares and 518,000 shares, respectively.

Commitments and contingencies. 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 remained pending as of August 1, 2026.

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.

The Company believes that 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 its financial condition, results of operations, or cash flows.

In February 2026, the U.S. Supreme Court issued a decision that tariffs imposed beginning in 2025 under the International Emergency Economic Powers Act (“IEEPA”) were not authorized under the statute. The Company subsequently filed claims for refunds of IEEPA tariffs paid. For the three month period ended August 1, 2026, the Company recognized a benefit of approximately $253 million related to these tariff recoveries in Cost of goods sold, with substantially all amounts received as of August 1, 2026.

Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and six month periods ended August 1, 2026 and August 2, 2025:


	Three Months Ended				Six Months Ended
	August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Home Accents and Bed and Bath	24	%	23	%	25	%	24	%
Ladies	23	%	23	%	23	%	23	%
Men’s	16	%	17	%	15	%	16	%
Accessories, Lingerie, Fine Jewelry, and Cosmetics	15	%	15	%	15	%	15	%
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 1, 2026 and August 2, 2025:


	Three Months Ended				Six Months Ended
($000)	August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Interest income	$	(37,767)	$	(40,326)	$	(78,818)	$	(87,194)
Capitalized interest	(2,878)		(2,963)		(5,955)		(8,367)
Interest expense on long-term debt	9,151		10,551		19,484		28,014
Other interest expense	350		392		696		792
Interest income, net	$	(31,144)	$	(32,346)	$	(64,593)	$	(66,755)

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 within annual reporting 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 May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). This ASU is intended to establish the recognition, measurement, presentation, and disclosure requirements for environmental credits and related obligations. The standard is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

Note B: Fair Value Measurements

FASB ASC 820, Fair Value Measurement, establishes a three-tier fair value hierarchy that 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.

The underlying assets held in Cash and cash equivalents, and restricted cash and cash equivalents include bank deposits, money market mutual funds, and U.S. Government and agency securities for which the fair value is determined using quoted prices for identical assets in active markets, which are considered Level 1 inputs. The fair values of Cash and cash equivalents, and restricted cash and cash equivalents as of August 1, 2026, January 31, 2026, and August 2, 2025 were as follows:


($000)	August 1, 2026		January 31, 2026		August 2, 2025
Cash and cash equivalents (Level 1)	$	4,288,124	$	4,594,392	$	3,847,016
Restricted cash and cash equivalents (Level 1)	$	68,800	$	67,581	$	66,277

As of August 1, 2026 and January 31, 2026, the underlying assets in the Company’s nonqualified deferred compensation program consisted of participant-directed mutual funds (Level 1) and fixed-income securities (Level 2). The mutual funds all have quoted market prices in active markets and are classified as Level 1. The fixed-income securities are measured at contract value, which represents the amount available to participants upon withdrawal, and are classified as Level 2. As of August 2, 2025, the underlying assets primarily consisted of participant-directed mutual funds that had quoted market prices in active markets and were classified as Level 1.

The fair value of the Company’s nonqualified deferred compensation program assets (included in Other long-term assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets) as of August 1, 2026, January 31, 2026, and August 2, 2025 were as follows:


($000)	August 1, 2026		January 31, 2026		August 2, 2025
Mutual funds (Level 1)	$	177,407	$	181,532	$	204,363
Fixed-income securities (Level 2)	42,716		37,122		—
Total	$	220,123	$	218,654	$	204,363

Note C: Stock-Based Compensation

Restricted stock awards. The Company grants shares of restricted stock and 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.

Restricted stock awards and performance awards are collectively referred to as stock awards.

A summary of stock awards activity for the six month period ended August 1, 2026, is presented below:


	Number of shares (000)	Weighted-average grant date fair value
Unvested at January 31, 2026	3,814	$	125.38
Awarded	620	212.17
Released	(1,389)	114.47
Forfeited	(65)	139.25
Unvested at August 1, 2026	2,980	$	148.20

The unamortized stock award compensation expense at August 1, 2026 was $228.3 million, which is expected to be recognized over a weighted-average remaining period of 1.8 years. The unamortized stock award compensation expense at August 2, 2025 was $278.2 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 Internal Revenue Service (“IRS”) annual share purchase limit of $25,000 in aggregate market value 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 1, 2026 and August 2, 2025, the Company recognized stock-based compensation expense as follows:


	Three Months Ended				Six Months Ended
($000)	August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Restricted stock	$	25,374	$	27,200	$	49,920	$	53,549
Performance awards	20,724		15,643		54,129		27,505
Employee stock purchase plan	1,159		1,100		2,328		2,185
Total	$	47,257	$	43,943	$	106,377	$	83,239

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and six month periods ended August 1, 2026 and August 2, 2025 was as follows:


	Three Months Ended				Six Months Ended
Statements of Earnings Classification ($000)	August 1, 2026		August 2, 2025		August 1, 2026		August 2, 2025
Cost of goods sold	$	18,942	$	18,660	$	41,116	$	36,263
Selling, general and administrative	28,315		25,283		65,261		46,976
Total	$	47,257	$	43,943	$	106,377	$	83,239

The tax benefits related to stock-based compensation expense for the three and six month periods ended August 1, 2026 were $7.1 million and $17.3 million, respectively. 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.

2026 Equity Incentive Plan. At the Company’s Annual Meeting on May 20, 2026, the stockholders approved the Ross Stores, Inc. 2026 Equity Incentive Plan (“2026 Plan”) which replaced the Company’s 2017 Equity Incentive Plan (“Predecessor Plan”). The 2026 Plan is authorized to have an initial reserve of approximately 15.8 million shares (subject to adjustment in accordance with the plan). The initial reserve represents an increase of 9.0 million shares from the total number of shares that remained available for issuance under the Predecessor Plan. The 2026 Plan became immediately effective upon stockholder approval. The Predecessor Plan was terminated such that no further awards will be granted under the Predecessor Plan.

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 1, 2026, weighted-average shares with an anti-dilutive effect were not material. 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.

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 1, 2026
Shares	317,687		1,763		319,450		318,322		2,021		320,343
Amount	$	2.68	$	(0.02)	$	2.66	$	4.72	$	(0.03)	$	4.69

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

Note E: Debt

Long-term debt. Unsecured senior debt (the “Senior Notes”), net of unamortized discounts and debt issuance costs, as of August 1, 2026, January 31, 2026, and August 2, 2025, consisted of the following:


($000)	August 1, 2026		January 31, 2026		August 2, 2025
0.875% Senior Notes due 2026	$	—	$	499,743	$	499,122
4.700% Senior Notes due 2027	241,459		241,230		241,003
4.800% Senior Notes due 2030	133,225		133,134		133,043
1.875% Senior Notes due 2031	497,250		496,962		496,676
5.450% Senior Notes due 2050	146,578		146,537		146,496
Total long-term debt1	$	1,018,512	$	1,517,606	$	1,516,340

Less: current portion	$	241,459	$	499,743	$	499,122
Total due beyond one year	$	777,053	$	1,017,863	$	1,017,218

1 Net of unamortized discounts and debt issuance costs of $6.5 million, $7.4 million, and $8.7 million as of August 1, 2026, January 31, 2026, and August 2, 2025, 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 2026, the Company repaid at maturity the $500 million principal amount of the 0.875% Senior Notes. 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 four outstanding series of Senior Notes was approximately $1.0 billion as of August 1, 2026. The aggregate fair values of the five then outstanding series of Senior Notes were approximately $1.5 billion and $1.4 billion as of January 31, 2026 and August 2, 2025, respectively. 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 facility. The Company’s $1.3 billion senior unsecured revolving credit facility (“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 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 Credit Facility is subject to a quarterly Consolidated Adjusted Debt to Consolidated Earnings before Interest, Income Tax, Depreciation, Amortization, and Lease Expense (“EBITDAR”) financial leverage ratio covenant. As of August 1, 2026, 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 rates for the three month periods ended August 1, 2026 and August 2, 2025 were approximately 25.0% and 24.2%, respectively. The increase of 0.8% in the effective tax rate for the three month period ended August 1, 2026 compared to the three month period ended August 2, 2025 was primarily due to the resolution of tax positions with various tax authorities. The Company’s effective tax rates for the six month periods ended August 1, 2026 and August 2, 2025 were approximately 23.9% and 24.7%, respectively. The decrease of 0.8% in the effective tax rate for the six month period ended August 1, 2026 compared to the six month period ended August 2, 2025 was primarily due to the tax effects associated with stock-based compensation. The Company’s effective tax rate represents the applicable combined federal and state statutory rates reduced by the federal benefit of state taxes deductible on federal returns. 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.

As of August 1, 2026, January 31, 2026, and August 2, 2025, the reserves for unrecognized tax benefits were $68.0 million, $61.3 million, and $66.5 million, inclusive of $8.6 million, $7.2 million, and $8.9 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, $54.2 million would impact the Company’s effective tax rate. 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 IRS under the statute of limitations for fiscal years 2022 through 2025. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2021 through 2025. 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.

Note G: Segment Reporting

The Company has two operating segments: Ross and dd’s DISCOUNTS. The operations of each operating segment 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 1, 2026 and August 2, 2025:


	Three Months Ended				Six Months Ended
($000)	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 Expenses1
Cost of goods sold, excluding occupancy costs2	3,782,799		3,669,114		7,656,757		6,923,765
Occupancy costs3	362,416		333,053		719,047		659,768
Store-related costs4	852,534		752,101		1,653,690		1,429,515
Other segment items5	163,519		136,610		338,224		256,331
Segment operating income	1,103,618		638,274		1,907,644		1,244,744
Interest income, net6	(31,144)		(32,346)		(64,593)		(66,755)
Earnings before taxes	$	1,134,762	$	670,620	$	1,972,237	$	1,311,499

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 Occupancy costs primarily includes rent, depreciation, and amortization related to the Company’s retail stores.
4 Store-related costs primarily includes store payroll, other store operating expenses, and advertising costs.
5 Other segment items primarily includes other general and administrative expenses.
6 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 1, 2026 and August 2, 2025, the related condensed consolidated statements of earnings, comprehensive income, and stockholders’ equity for the three and six month periods ended August 1, 2026 and August 2, 2025, and cash flows for the six month periods ended August 1, 2026 and August 2, 2025, 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 January 31, 2026, 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 30, 2026, 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 January 31, 2026, 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 1, 2026

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