AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 19/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Established late-cycle purchasing, flexible vendor requirements and substantial packaway operations support a sourcing cost advantage, corroborated by strong existing-store demand and a large operating footprint. Comparative cost superiority remains issuer-reported and unproven against off-price peers.
durability · 2/4 · The sourcing model appears consistently across the 2024 and 2026 disclosures and supports continued expansion. Dependence on discretionary merchandise supply and substantial competing retailers limits confidence in enduring protection.
customer dependency · 1/4 · The disclosed customer proposition rests on attractive branded discounts in a market with many alternatives. Strong comparable-store sales demonstrate demand, but the passages establish little customer dependence or switching friction.
erosion resilience · 2/4 · Recent comparable-store growth and first-quarter margin improvement indicate current resilience. Fiscal 2025 margin contraction, merchandise supply dependence and physical-channel exposure temper that evidence; risk disclosures do not establish realized erosion.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Ross reports selling branded goods at substantial discounts and using lower markups, while comparable-store sales show that the value proposition attracts demand. This supports effective value pricing, but neither premium pricing nor like-for-like price increases are demonstrated.
retention · 2/4 · Comparable-store sales increases of 17% and 10% in the first two fiscal 2026 quarters support sustained demand at established stores. This is indirect evidence: acquisition, repeat purchases, traffic and ticket changes cannot be separated.
margin resilience · 2/4 · Fiscal 2025 operating margin declined 35 basis points, followed by first-quarter improvement from 12.2% to 13.4%. Removing the disclosed $253 million tariff recovery gives a calculated second-quarter operating margin of approximately 13.6%, versus 11.5% a year earlier. The evidence is favorable recently but mixed across periods and does not isolate pricing from sourcing or operating leverage.
contractual freedom · 3/4 · The disclosed pricing process places markdown decisions with buyers through weekly sales reviews, demonstrating practical discretion over retail prices. Competition constrains economic freedom, and comprehensive supplier restrictions are not supplied.
Predictability94
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 3.96
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.52
Financial strength92
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 66.62
- Debt / FCF (x)
- 0.69
- Net debt / operating income (x)
- -1.14
- Current ratio (x)
- 1.58
- cashInterestPaid
- 55.78
- cashInterestCoverage
- 54.27
Capital allocation98
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 94.25
- 3-year average dilution (%)
- -2.10
- 3-year average SBC / revenue (%)
- 0.74
- cashConversionGrade
- 91.59
Management75
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · First-half fiscal 2026 operating cash flow of approximately $1.712 billion funded $460 million of capital spending, $638 million of repurchases and $286 million of dividends, alongside a $500 million debt repayment. Cash remained approximately $4.288 billion and outstanding shares declined year over year. These are demonstrated financing outcomes; buyback valuation and incremental store returns are unestablished.
incentive alignment · 3/4 · Actual compensation arrangements combine performance-conditioned shares, subsequent service vesting, extended restricted-stock vesting and ownership guidelines. Alignment is meaningful but imperfect: guidelines count unvested shares, some officers are only on track, fiscal 2025 payout ranges were broadened, and the approved plan added nine million reserved shares. Authorization is not actual issuance.
execution · 3/4 · Strong comparable-store sales, expansion to 2,328 stores and increased operating cash generation demonstrate effective execution. This assessment uses operating outcomes rather than direct attribution to particular initiatives or executives. Tariff recoveries explain part of reported profit improvement, and new-store investment returns are not disclosed.
governance · 3/4 · Separate chair and CEO roles, five independent-director executive sessions during fiscal 2025 and an adopted compensation clawback policy establish substantive oversight practices. Broadened incentive payout ranges warrant scrutiny; the passages do not demonstrate exceptional oversight effectiveness or actual clawback enforcement.
Evidence
By purchasing later in the merchandise buying cycle than department, specialty, and discount stores, we are able to take advantage of imbalances between retailers’ demand for products and manufacturers’ supply of those products.
Business / Merchandising, Purchasing, and Pricing · Filed 31/03/2026
We typically do not require that vendors or manufacturers provide promotional allowances, co-op advertising allowances, return privileges, drop shipments to stores, or delayed deliveries of merchandise.
Business / vendor purchasing requirements · Filed 31/03/2026
These flexible requirements further enable our buyers to obtain significant discounts on purchases.
Business / purchasing discounts · Filed 31/03/2026
The off-price buying strategies utilized by our experienced team of merchants enable us to purchase Ross merchandise at net prices that are lower than prices paid by department and specialty stores, and to purchase dd’s DISCOUNTS merchandise at net prices that are lower than prices paid by moderate department and discount stores.
Business / comparative merchandise acquisition costs · Filed 31/03/2026
Packaway inventory was 37% of total inventory at the end of fiscal 2025, compared to 41% at the end of fiscal 2024.
MD&A / packaway inventory · Filed 31/03/2026
The off-price buying strategies utilized by our experienced team of merchants enable us to purchase Ross merchandise at net prices that are lower than prices paid by department and specialty stores, and to purchase dd’s DISCOUNTS merchandise at net prices that are lower than prices paid by moderate department and discount stores.
Business / comparative merchandise acquisition costs · Filed 02/04/2024
18 Store Openings The following table summarizes the stores opened and closed during the three and six month periods ended August 1, 2026 and August 2, 2025: Three Months Ended Six Months Ended Store Count August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Ross Dress for Less Beginning of the period 1,917 1,847 1,904 1,831 Opened in the period 35 28 48 44 Closed in the period — (2) — (2) Total Ross Dress for Less stores end of period 1,952 1,873 1,952 1,873 dd’s DISCOUNTS Beginning of the period 365 358 363 355 Opened in the period 12 3 16 6 Closed in the period (1) (1) (3) (1) Total dd’s DISCOUNTS stores end of period 376 360 376 360 Total stores end of period 2,328 2,233 2,328 2,233 We opened 47 new stores in the second quarter of fiscal 2026, consisting of 35 Ross stores and 12 dd’s DISCOUNTS stores.
MD&A / Store Openings · Filed 01/09/2026
•Comparable store sales increased 17%.
MD&A / first-quarter fiscal 2026 comparable-store sales · Filed 02/06/2026
•Comparable store sales increased 10%.
MD&A / second-quarter fiscal 2026 comparable-store sales · Filed 01/09/2026
We face a challenging and rapidly changing macroeconomic and retail environment that creates intense competition for our business from online retailers, department stores, specialty stores, discount stores, warehouse stores, other off-price retailers, and manufacturer-owned outlet stores, many of which are units of large national or regional chains that have substantial resources.
Competition / competing retail formats · Filed 31/03/2026
While our business is exclusively in brick-and-mortar stores, consumer e-commerce spending continues to increase.
Competition / physical stores and e-commerce · Filed 31/03/2026
STRATEGIC RISKS We depend 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.
Strategic Risks / merchandise availability · Filed 31/03/2026
If we make packaway purchases that do not align with consumer preferences at the later time of release to our stores, we could have significant inventory markdowns.
Risk Factors / packaway markdown exposure · Filed 31/03/2026
26 Operating income. Operating income as a percentage of sales for fiscal 2025 decreased by 35 basis points compared to fiscal 2024, as both SG&A and cost of goods sold increased as a percentage of sales period-over-period.
MD&A / fiscal 2025 operating income · Filed 31/03/2026
To the extent that certain of our vendors decide not to sell to us or go out of business, the amount of high quality merchandise available to us could also be materially reduced.
Risk Factors / vendor supply availability · Filed 02/04/2024
Pricing. We sell brand name merchandise at Ross that is priced 20% to 60% below most department and specialty store regular prices.
Business / Ross selling-price discounts · Filed 31/03/2026
We generally purchase our merchandise at lower prices and mark it up less than a department or specialty store.
Business / acquisition prices and markups · Filed 31/03/2026
Our buyers review their departments in our stores for possible markdowns based on the rate of sale on a weekly basis, as well as at the end of fashion seasons, to promote faster turnover of merchandise inventory and to accelerate the flow of fresh product to our stores.
Business / buyer discretion over markdowns · Filed 31/03/2026
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 Earnings · Filed 01/09/2026
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.
Note A / recognized tariff recoveries · Filed 01/09/2026
6 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.
Condensed Consolidated Statements of Cash Flows · Filed 01/09/2026
4 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 Balance Sheets · Filed 01/09/2026
•Restricted Stock Awards: Restricted stock awards granted to our NEOs are structured to vest in large increments in future years after grant, and generally vest over four to five years of service.
Executive Compensation / restricted stock vesting · Filed 07/04/2026
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.
Note C / performance share award conditions · Filed 01/09/2026
If attained, the restricted stock then vests over a service period, generally three years from the date the performance award was granted.
Note C / subsequent service vesting · Filed 01/09/2026
Our formal stock ownership guidelines for directors and executive officers are as follows: Position Stock Ownership Guidelines (Dollar Value of Shares) Directors 5 x Authorized Base Annual Cash Retainer Compensation Chief Executive Officer 6 x Base Salary Other NEOs 3 x Base Salary Directors and executive officers are allowed five years to initially meet the stock ownership levels.
Executive Compensation / ownership guidelines · Filed 07/04/2026
38 As of January 31, 2026, all current executive officers, and all independent Board members, have met or are on track to meet the applicable stock ownership guidelines within the five-year window.
Executive Compensation / ownership guideline status · Filed 07/04/2026
During the fiscal year, the independent directors held five meetings in executive session without management.
Corporate Governance / independent director executive sessions · Filed 07/04/2026
Board Leadership Structure. Our Board has long separated the roles of Chair of the Board (“Board Chair”) and Chief Executive Officer (“CEO”).
Corporate Governance / separation of chair and CEO · Filed 07/04/2026
In November 2023, the Committee adopted a Policy for Recovery of Erroneously Awarded Compensation (“Clawback Policy”) for current and former executive officers (those officers who are required to file reports under Section 16(a) of the Exchange Act), which is intended to comply with applicable Nasdaq listing standards and other relevant requirements.
Executive Compensation / adopted clawback policy · Filed 07/04/2026
In response to this highly uncertain environment, the Committee adopted broader performance ranges and revised the payout schedules for the fiscal 2025 annual cash incentive bonuses and performance share awards, while maintaining a fully formulaic payout structure.
Executive Compensation / fiscal 2025 performance ranges · Filed 07/04/2026
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.
Note C / approved equity plan reserve increase · Filed 01/09/2026
•Operating income as a percentage of sales was 13.4%, compared to 12.2% in the first quarter of fiscal 2025.
MD&A / first-quarter operating margin · Filed 02/06/2026
