Ross Stores Sinks 13% on Weak Q2 Outlook, Tariff Pressures Weigh

Ross Stores (NASDAQ:ROST) shares plunged over 13% after the discount retailer issued second-quarter guidance well below Wall Street expectations, citing tariff-related costs and broader macroeconomic uncertainty.

The company posted Q1 earnings per share of $1.47, ahead of the $1.43 consensus. Revenue rose 2.6% year-over-year to $4.98 billion, slightly beating forecasts of $4.94 billion. Comparable store sales were flat versus the prior year.

However, investor sentiment turned sharply negative on the company’s Q2 outlook. Ross expects EPS between $1.40 and $1.55, falling short of the $1.66 analyst estimate. The company said the guidance reflects a $0.11 to $0.16 per share impact from newly imposed tariffs.

Additionally, Ross warned of a 90 to 120 basis point hit to gross margin in Q2 due to increased costs tied to packaway inventory, ticketing expenses, and a high concentration of tariff-affected imports from China.

While the Q1 beat reflected operational resilience, the unexpectedly steep Q2 margin and earnings drag prompted a sharp selloff, with investors reevaluating near-term earnings power amid a shifting trade backdrop.