With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

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World's Most Admired Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-242-Ross Stores

The discount retailer operates more than 1,500 Ross Dress for Less stores, which are located throughout 40 states, the District of Columbia, and Guam, as well as 277 dd’s DISCOUNTS stores across 21 states. The company temporarily closed all its stores for nearly two months in 2020 but has since made up for revenue losses as sales have bounced back.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-202-Ross-Stores

The discount retailer operates more than 1,500 Ross Dress for Less stores, which are located throughout 39 states, the District of Columbia, and Guam, as well as about 260 dd’s DISCOUNTS stores across 19 states.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Ross Stores operates one of the largest off-price apparel and home goods chains in the U.S. As of early 2025, there were more than 1,800 Ross Dress for Less stores across 44 U.S. states, plus Guam and the District of Columbia. Ross sells apparel, accessories, footwear, and home goods at a 20% to 60% discount compared with regular department store prices. The company also operates over 350 DD’s Discounts stores, offering clothes, accessories, and more at moderate prices. Founded in 1982, Ross Stores continues to add locations, opening 19 stores across 14 states in March 2025.

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Ross Stores (ROST): Company Profile, Stock Price, News, Rankings

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Ross Stores

ross stores

Good afternoon, welcome to the Ross Stores fourth quarter and fiscal 2025 earnings release conference call. The call will begin with prepared comments by management, followed by a Q&A session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, new store openings, and other matters that are based on the company's current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations.

Risk factors are included in today's press release and the company's fiscal 2024 Form 10-K and fiscal 2025 Form 10-Qs and 8-K is on file with the SEC. Now I'd like to turn the call over to Jim Conroy, Chief Executive Officer.

Thank you, John, and good afternoon, everyone. Joining me on our call today are Michael Hartshorn, Group President and Chief Operating Officer, Bill Sheehan, Executive Vice President and Chief Financial Officer, and Connie Kao, Senior Vice President, Investor Relations. Before I review our performance for the quarter and the year, I wanted to acknowledge all of the associates throughout the Ross organization. The results we achieved in 2025 are a direct reflection of your dedication and hard work throughout the year. The strong collaboration across the company in all functional areas was essential to our success. I want to thank all of you for your great work. Turning to our quarterly results. As noted in today's press release, we are pleased to report that our business momentum accelerated further in the fourth quarter, with both sales and earnings significantly surpassing our expectations.

Throughout the holiday season, we delivered compelling merchandise assortments to our stores, benefited from higher customer engagement through our new marketing campaigns, executed in-store initiatives that enhanced the customer experience. These efforts, combined with healthy growth in new stores, contributed to a 12% growth in total sales for the quarter. Turning to comparable store sales growth, we delivered a robust 9% increase despite a one percentage point erosion in comps from weather, primarily the January storms that impacted many parts of the country. We were quite pleased with the health of the comp growth as it was driven mainly by an increase in transactions and customers with a modest increase in basket. We saw broad-based strength across both departments and geographies. Every major merchandise category showed solid positive sales growth, with shoes and cosmetics performing the best.

Similarly, every region of the country was positive, with the Midwest and Mountain regions the strongest. dd's DISCOUNTS also posted healthy sales gains as the chain's value and fashion offerings continued to resonate with shoppers. Similar to Ross, the growth was broad-based across both merchandise categories and regions. Moving to inventory, consolidated inventories were up 8% and packaway represented 37% of total inventory, compared with 41% last year. We are pleased with our inventory position at year-end. Regarding our store expansion program, 2025 was an exciting year of continued growth as we expanded into new markets while deepening our footprint in existing ones. During the year, we added 80 new Ross Dress for Less stores and 10 dd's DISCOUNTS stores. Importantly, we expanded into several new markets for Ross, including our first stores in the New York Metro area and Puerto Rico.

Inclusive of nine closures, we ended the year with 2,267 stores, consisting of 1,904 Ross Dress for Less and 363 dd's DISCOUNTS locations. Before I turn the call over to Bill, I'd like to briefly review initiatives underway that position us well for incremental sales and profit growth as we enter 2026. First, with merchandising. We are pleased with the strength of our assortments across the store, where we have delivered more brands at the right values for our customers. Our buying organization has done an incredible job navigating through tariffs and strengthening our vendor relationships to deliver merchandise that is resonating with our customers. It is encouraging to see the strength in the ladies business, as well as the solid growth and continued sequential improvement with our home category, which faced heavy pressure from tariffs throughout the year.

Looking forward, we are pleased with our inventory levels and are seeing ample availability in the marketplace to support our business trend going forward. On the marketing front, we are pleased with our holiday campaign as we continue to refine our brand messaging and believe that it's connecting with today's shopper. We are encouraged by the higher levels of customer awareness and engagement we are seeing. We are also quite pleased with the increase in customer traffic and believe that this positions us well for continued growth as we look ahead. In our stores, we have made meaningful merchandising and operational improvements, which we believe also contributed to the outsized sales growth. The stores team did a great job of managing the holiday surge in the business.

Additionally, the supply chain organization executed extremely well during the peak season, which enabled us to drive exceptional sales growth through fresh receipts and fast turning inventory. Overall, we are encouraged by the positive impact these initiatives have had on our recent performance, and we see opportunities to build on these learnings to support our growth plans in 2026 and beyond. As we enter the new year, we are seeing a very strong start to the first quarter, which gives us confidence that our focus on improving our connection with the customer is taking hold. Turning to store expansion. Many of the changes we implemented that helped drive comp store sales growth also had a positive impact on new store productivity, which further bolsters our confidence in accelerating our store opening plans going forward.

As a result, we are planning to open 110 new locations this year, which represents 5% growth. Part of that growth reflects the re-acceleration of dd's DISCOUNTS, with plans to open 25 stores in 2026. For Ross, we see an opportunity to open 85 new stores this year, slightly above last year. As we continue to identify attractive real estate opportunities across our markets, we remain confident in the long-term potential to grow Ross and dd's chains to 2,900 and 700 stores, respectively, and expand our reach to even more customers over time. Bill will provide further details on our fourth quarter and fiscal year results and additional color on our outlook for fiscal 2026.

Thank you, Jim. Turning to our financial results, starting with the fourth quarter. Total sales for the quarter grew 12% to $6.6 billion. Comparable store sales grew a robust 9%, primarily driven by an increase in the number of transactions. Fourth quarter 2025 operating margin was 12.3% compared to last year's 12.4%, which included 105 basis point benefit from the sale of a packaway facility. Excluding the benefit last year, operating margin increased 95 basis points. Cost of goods sold was 65 basis points lower in the quarter. Occupancy leveraged by 30 basis points on strong sales results, while distribution and domestic freight costs declined by 20 and 15 basis points, respectively. Merchandise margin improved by 10 basis points.

Partially offsetting these benefits were buying costs that rose by 10 basis points, mainly due to higher incentives given the earnings outperformance. SG&A for the period rose 75 basis points, primarily due to last year's packaway facility sale. Excluding the sale, SG&A was 30 basis points lower. Fourth quarter net income was $646 million, and earnings per share for the fourth quarter was $2. This compares to net income of $587 million and $1.79 in earnings per share in the prior year, which included the previously mentioned benefit of approximately $0.14 per share related to the sale of a packaway facility. Excluding the benefit, earnings per share for the quarter grew 21%. Now turning to results for the full year.

Total sales for the year increased 8% to a record $22.8 billion, up from $21.1 billion last year. Comparable store sales grew 5% on top of a solid 3% gain in fiscal 2024. Net income for fiscal 2025 was $2.1 billion, similar to last year. Earnings per share were $6.61, up from $6.32 in the prior year. Excluding the previously mentioned $0.14 gain from the facility sale last year and the approximate $0.16 per share impact from tariff-related costs this year, earnings per share grew 10%. To our shareholder return activity. As noted in today's release, we repurchased 1.5 million shares during the quarter, completing the two-year, $2.1 billion program announced in March 2024, in line with our plans.

Our board of directors recently approved a new two-year, $2.55 billion stock repurchase authorization, or approximately $1.275 billion each year for fiscal years 2026 and 2027. This new plan represents a 21% increase over the recently completed repurchase program. In addition, the board also approved a 10% increase in our quarterly cash dividend to $0.445 per share. The increase to our stock repurchase and dividend programs reflect our continued commitment to return excess cash to our shareholders after funding growth and other capital needs of our business. Now let's discuss our outlook for fiscal 2026, starting with the first quarter. As Jim noted earlier, we ended the quarter with solid momentum. While early, we are encouraged by the continued strength in the business as the spring season begins.

As a result, we are projecting comparable store sales for the 13 weeks ending May 2, 2026 to be up 7%-8% and earnings per share of $1.60-$1.67. The operating statement assumptions that support our first quarter guidance include total sales are projected to increase 10%-12% versus last year. If same store sales perform in line with our forecast, operating margin for the first quarter is expected to be in the range of 11.8%-12.1% compared to 12.2% last year. The expected decrease reflects higher DC costs from the opening of the new distribution center in the second quarter of last year and unfavorable timing of packaway related expenses.

In addition, we project higher incentive costs versus 2025 when we underperformed our plan. Partially offsetting these higher costs is our expectation of an increase in merchandise margin. We plan to add 17 new stores consisting of 13 Ross and four dd's DISCOUNTS during the period. Net interest income is estimated to be $27 million. Our tax rate is expected to be approximately 23%-24%, and weighted average diluted shares outstanding are forecasted to be about 322 million. Turning to our full year guidance assumptions for 2026. For the 52 weeks ended January thirtieth, 2027, we are forecasting same store sales to be up 3%-4% and earnings per share to be $7.02-$7.36, compared to $6.61 for fiscal 2025.

Total sales are projected to be up 5%-7% for the year. If same store sales perform in line with our forecast, operating margin for the full year is expected to be in the range of 12%-12.3%, compared to 11.9% in 2025. This plan reflects higher merchandise margin and lower distribution costs for the year. As Jim mentioned earlier, we expect to grow our store base by 5%, reflecting approximately 110 new locations comprised of about 85 Ross and 25 dd's DISCOUNTS. These openings do not include our plans to close or relocate about 10-15 older stores. Net interest income is estimated to be $92 million. Depreciation and amortization expense, inclusive of stock-based amortization, is forecasted to be about $740 million for the year.

The tax rate is projected to be about 24%-25%, weighted average diluted shares outstanding are expected to be about 319 million. Capital expenditures for 2026 are projected to be approximately $1.1 billion. There are several key investments included in our 2026 plans. First, as previously mentioned, we are re-accelerating our store opening plans. At dd's, we are opening 25 stores this year compared to 10 last year. We plan to open 85 new Ross Stores this year compared to 80 last year. We plan to make further investments in our supply chain, including the continued build out of our next distribution center, as well as the initial outlay for another DC. We are investing in our existing store base to drive an improved customer experience.

Now I will turn the call back to Jim for closing comments.

Thank you, Bill. As I reflect on my first year as CEO, I am extremely grateful for the support and dedication of the entire team. The year had its early challenges with tariffs and uncertainty in the macro environment, but we remained resilient and focused on executing our strategies. Looking ahead, we're optimistic about the strength of our business and the initiatives planned for 2026. At this point, we would like to open the call and respond to any questions that you might have. John?

Thank you. We will now be conducting the Q&A session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up. Thank you. One moment, please, while we poll for questions. The first question comes from the line of Matthew Boss with JPMorgan. Please proceed with your question.

Jim, could you elaborate on the inflection to 8% traffic led comps in the back half of the year? I guess, how would you bridge the more than 600 basis points of comp improvement relative to low single digits over the last four quarters? On the 7% to 8% comp guide, you know, I had to ask you on this, I mean, this comes from a conservative company and a conservative guy historically. Could you elaborate on the further improvement you saw to start the quarter? Maybe confirm the moderation that you're embedding for the remainder of the quarter, and did you embed any potential lift from tax refunds or stimulus during the quarter?

Sure. Happy to answer both of those questions. In terms of the inflection point, it was really broad-based across essentially all merchandise categories, all regions of the country. You were talking about the sequential improvement from sort of the first half to the second half of the business of the year. If I look at the second half in total, there's a lot of great things that are coming together. We've had a lot of conversation on past calls about the ladies business. We mentioned on Q3 that the ladies business had returned to strength, was slightly stronger than the company. On the fourth quarter, the ladies business continued to be very strong, more in line with the overall business. Men's continues to be strong.

We've seen probably the most sequential improvement in the quadrant of the store that we would call center core. We call that cosmetics and shoes specifically. Those were two very nicely growing businesses for us in both Q3 and Q4. Really nice sequential improvement throughout the year. Finally, not to leave Gurmeet and the home business and the home team out. The home business in the beginning of the year was kinda difficult for us, and it was a business that was most under attack with tariffs. They have done a really nice job of turning around that business across the board within home. On our last call, we spoke specifically about toys being important, we finished up the holiday quarter with very strong business in toys.

In terms of the comp guide, I would turn to Bill or to Michael. But I would, I would preface it with we of course are excited about a 7%-8% comp guide, but we haven't changed the conservative nature of our guide. It's not like we're putting out some high-flying number to get headlines. We still feel pretty good about it. I don't know if you, either of you would like to add to that.

No, Matt, I would say one, it is a reflection of the initiatives we have in place and the momentum we have coming out of the fourth quarter. The merchants did a tremendous job transitioning into the first quarter that we can see in the business. We're in the inverse position we were last year where we started off very, very weak. We feel good about how we started the year. You had a question on tax refunds. We haven't built anything in for the tax refunds. It's still early. Obviously, in the tax refund season, the significant refunds just began to flow last week. From what we can see from the treasury, they're up about 7% thus far.

With roughly two-thirds of the refunds left to come, we'll have to wait and see the impact over the entire quarter.

Great. Just one follow-up, Jim, on new stores, the productivity that you're seeing in the Northeast, how does that inform your opportunity to expand the unit growth opportunity over time?

Matt, it's Michael again. We wouldn't get into the specifics of the Northeast other than it's been very strong and it gives us a lot of confidence that we can grow there. I would say, but not only in the Northeast, and you can see it in the difference between, comp and total sales growth. We had one of our best years in a while in terms of new store productivity, which also gives us confidence that we can grow in our existing market.

The next question comes from the line of Paul Lejuez with Citigroup. Please proceed with your question.

Thank you. It's Tracy Kogan filling in for Paul. I had two questions. The first is on your merchandise margin improvement in Q4. How much of it was driven by better IMU from buying better versus how much was driven by lower markdowns? What are you expecting in FY 2026? I have a follow-up. Thanks.

No, for the merchandise margin at 10 basis points improvement, I think we feel good about it. It was driven, you know, mostly by better buying and our merchants just making good decisions as they always do around how to deliver value at the same time, flowing some benefit through to us.

On 2026, it's again, it's mainly driven by the better buying. To some extent, we get some benefit from recapturing some of the tariff pressure early in the year.

Great. On the flow-through in Q1, I know you mentioned higher incentive comp and timing of packaway. Can you size either of those headwinds and which one's bigger? Thanks.

Could you repeat the question for me one more time?

I think, on the 7%-8% comp, we would have expected maybe more flow through to the EPS line. I think you mentioned that you had a higher incentive comp in there as well as timing of packaway. I was just wondering if you could frame how big either of those are in terms of basis points of pressure for the quarter.

Tracy, it's Michael. As you can see on the full year guidance, at a 3%-4% comp, we leverage EBIT by 10% to 30%. That's actually above what our normal kind of long range algorithm, always timing quarter to quarter. In the first quarter, we have a couple things driving the deleverage. The first of which is we haven't yet lapped the distribution center opening from last year, so we'll begin to lap that in the second quarter, but that has a bigger impact in the first quarter. Number two, we have built into our forecast, we'll have to see how it plays out, some pressure on the packaway impact, the packaway expense.

Finally, we had a pretty disappointing first quarter for us last year, which means the incentive comp base will be lower from last year, but pressure this year. Among those, they're pretty evenly split.

Got it. Thanks very much. Good luck, guys.

The next question comes from the line of Lorraine Hutchinson with Bank of America. Please proceed with your question.

Thank you. Good afternoon. What are the key factors driving the acceleration in the ladies business, and what's your outlook for the category as we move through the year?

The acceleration in the ladies business is rooted back with the brand strategy. The company had put that in place maybe two years ago now, and that team has really done a great job of resetting that vendor base and the assortment there, finding a really nice balance of bringing in branded bargains across good, better and best. We've seen some nice strength in the juniors business specifically, so that's been a part of the growth there. In terms of the outlook going forward, right now, a lot of things are performing quite well. I would imagine we're gonna see continued strength in that business going forward, certainly in the first half of 2026. Did I get all of your questions there, Lorraine?

Thanks. Yeah. It seems like you brought more inventory into the stores during the holiday season. Is this a change in strategy, and would you expect to move more from the distribution centers into the stores as you did for the Q4?

Hi, Lorraine. On inventory, we did mention in our remarks that inventory grew 8%. Obviously, that's 1 point in the quarter, but that's lower than our overall sales growth. We did see opportunities to increase our inventory position in front of the customer, and we believe that supported our growth and ability to chase sales in Q4 while also better transitioning into Q1, all of that while maintaining solid margins and inventory turns.

I think we do have more opportunity, but we feel good about the levels coming into the first quarter.

The next question comes from the line of Chuck Grom with Gordon Haskett. Please proceed with your question.

Hey, good afternoon. Great results. you know, Jim, you talked a lot about the changes made in marketing, and the social media campaigns have been highly successful. I guess I'm curious how you continue to evolve the marketing strategy in 2026. Do you expect marketing expenses as a % of sales to start to move higher over the next couple of years, or do they stay consistent?

Great question. We're really pleased with the marketing team, the new campaigns and the agency that was put in place at the beginning of 2025. Their work started to hit the market, so to speak, for back to school. I would say we're really pleased with amongst a number of other factors, the change in marketing was one of the things that helped the business have an inflection point positive. The change in marketing, some in-store changes, of course, the assortments being really great. You put all that together, and it just made for a really good Q3 and Q4. In terms of marketing spend, we've had questions as to whether we're going to spend or invest more in marketing.

We're, we're pretty pleased with the results in Q3 and Q4. As a rate of sales, we haven't changed our marketing spend. It certainly seems like it could be a lever for us to use going forward. We might experiment with some slight increase there. What we don't feel like we need to make any major investments in new marketing to drive traffic because the demand generation part of the business right now seems so strong.

Okay, that's great. Just to double-click on the second part of your answer there on the store experience. Can you dive in there? What's worked? What can you expand? How much is left on the opportunity set within the stores themselves? Because clearly, NSP, to your point earlier, was very strong for the second quarter in a row, along with the good comp.

Hi, it's Michael. On the storefront, similar to marketing, we haven't made major investments there, but we do have a pretty strong test and learn capability in our store organization. What we did during the back half of the year is we targeted payroll investments to improve both store recovery and register throughput, really focusing on high volume activity in the store. We clearly saw some early successes that we can build on those learnings in 2026. The other thing that you'll see in 2026, as we've discussed in the past, we've been piloting self-checkout actually for some time now, and we plan to expand to more stores given the positive results we've seen thus far.

The next question comes from the line of Brooke Roach with Goldman Sachs. Please proceed with your question.

Good afternoon. Thank you for taking our question. Jim, I wanted to follow up on your marketing comments. As you assess the higher pace of traffic that's coming into the store, are you seeing any shifts in the age or household income demographic of your customer base? Is this a reactivation of lapsed customers, or are these new younger customers coming into the store that can repeat?

It's a great question. Starting at the top side, we're very encouraged that we are seeing nice customer count growth, right? It's hard to determine sometimes whether that's a quote, unquote, "brand new customer" or a lapsed customer returning. It's really exciting for us to have comp sales growth driven not only by transactions, but by customers finding Ross, and we're really investing in the Ross brand. In terms of how those customers split by income and age, et cetera. It's. Once you push down to that level, the data becomes a little bit more complicated to read. We're very comfortable saying that we've seen growth, very broad-based across income demographics, age demographics, including 18 to 34-year-old customers. We're pleased with our juniors business. We're pleased with our young men's business.

We feel good about the younger portion of the customer base. Overall, we're just quite encouraged to start to see some really nice acceleration in customer count.

Great. As a follow-up, can you share your latest view on the earnings algorithm for Ross on a multi-year basis? Is there anything that's structural preventing you from returning to a 14% operating margin over time?

Sure, Brooke. The algorithm hasn't changed dramatically. New store growth, we have at 5%, obviously that would suggest this year we're at 5%, that we'd continue to grow both banners, and we think we can do that over time to maintain the new store growth there. Productivity, Jim mentioned that we've seen heightened productivity. Built into our guidance this year is about 70%-75% new store productivity of an average store. That gets you to 3%-4% growth. The EBIT margin, we've said historically, will get leverage between 3%-4%. Occupancy is about 4%. SG&A is 3%-4%. The stock repurchase is about 2%. It gets you to the about 8%-10% long-term earnings growth.

The next question comes from the line of Michael Binetti with Evercore. Please proceed with your question.

Hey, guys. Great quarter. First quarter has been a source of underperformance on a multi-year basis. You thought there was an opportunity to maybe come out of the holiday, Jim, and transition a little more aggressively into the transition inventory. Can you help us understand within the context of the 7%-8% comp, with the margins compressing on some of the biggest comps, can you just walk us through? Is there something unique in first quarter that you're kinda going for it to get to that 7%-8% comp that isn't as much of an opportunity as you get out to the rest of the year? Is it something that you have to invest in to get there as we look at the margin?

On the, on the margins, you know, if I look at 2025, that it's coming in at 11.9% for the year, excluding tariffs, that's probably in the low 12s. This year you're guiding 12.1% to 12.3% on the best comp guidance we've seen in a while, and that's lapping some of the duplicative executive costs, the distribution center costs that wrap around for just 1 quarter, and then there was some reticketing last year. Can you just talk about what's conservative there or if there's, you know, a change to the, to the long, to the long-term language of 15 basis points of expansion above the 2 to 3 points of comp or anything like that we should think about?

I would separate the EBIT margin. I'm happy to. this, I would separate the EBIT margin in the first quarter from the comp because I think there's distinct things that I walked through with, we haven't lapped the DC. We have packaway pressure in the first quarter, and also we had a lousy start last year, we're working off a lower incentive base from last year. Those are really the things that are impacting EBIT margin in the first quarter. In terms of the seven to eight guidance, it's a reflection of certainly the momentum coming out of the fourth quarter, but also we're up against pretty weak compares, not only last year, as you mentioned, but over the last couple years.

We think the initiatives we have in place, including, as I mentioned earlier, with inventory levels, are having an impact in the first quarter and are sustaining. In terms of the back half of the year, nothing's really changed in our earnings algorithm. For every point of comp over the guidance, it's worth about 10 to 15 basis points of EBIT margin.

Just to add to that, there's been questions for the last year about are we investing more in marketing or investing more in store labor. As a rate of sales, both marketing and store labor are very much in line with last year. We don't intend to sort of buy the comp in Q1 or for the year going forward. I think Michael answered the flow-through question better than I could have. If and when we decide at some point to overinvest in a part of the business, hoping for an ROI on it, we will signal that. At the moment, you know, we're getting some really nice growth without making artificial investments.

Okay. Thanks a lot, guys. Congrats again.

The next question comes from the line of Mark Altschwager with Baird. Please proceed with your question.

Could you expand on the higher new store productivity you're seeing? Is that a function of the markets you're entering that are perhaps higher rent but structurally higher sales per square foot? Is it a reflection of the operational improvements you cited in the prepared remarks? Just what are the key factors there?

We are, first, I'd say it's overall, it's not just the new markets. We're seeing it across the regions, even some of our tried and true regions in California, Florida, and Texas. I think it is a reflection of some of the things we're doing in existing stores, being more aggressive out of the gate in new stores and seeing it pay off. That said, to your point, we are entering more populated, higher rent markets, and we're very pleased with our entry and are seeing great performance there.

Thank you. Following up on the branded strategy and the success in ladies apparel, can you talk about the roadmap for replicating that success in other categories? What's the next area of focus?

Well, the branded strategy cuts across the whole store. It's probably most prominent within the ladies business. As we talked a bit in the prepared remarks, the growth for the quarter, actually for each of the last few quarters, was very broad-based. As I look at comps by merchandise category between men's, ladies, kids, the whole center core set of businesses, cosmetics and shoes, all very strong. Home has really regained its ground. It's slightly comp eroding, but given where it started in the beginning of the year, it's very much in play for, you know, helping us drive a very strong fourth quarter comp. It's not really a sequential rollout between ladies and the other businesses. I think it's kind of now in our DNA.

We're just kind of looking forward as to how we, how we grow our business going forward quarter to quarter. Again, nearly every piece of our business, actually every major merchandise category was solidly positive. We had a very strong business in outerwear, which was a bigger business for us this quarter than it's been in the past. It's very broad-based.

The next question comes from the line of Simeon Siegel with Guggenheim. Please proceed with your question.

Thanks. Hey, good afternoon, everyone. Really nice job. Jim, just following up on the last one. When thinking about the branded effort, any way to frame how AUR has been looking on a category level? Before accounting for any category shifts, just within the categories that you're working after, how AUR looks. Did you guys quantify the new store versus maintenance CapEx within next year's guide? Thank you.

On the AUR piece, look, our AUR increase was pretty modest in the quarter. I think we called out basket, a modest increase in the basket, most of the comp coming from transactions. The UPT was flattish versus last year. You could surmise AUR was just a modest increase as well. It was a little disproportionate to the part of the business that got hit hardest by tariffs, which was home. Home was up. The other businesses didn't see that much of a AUR increase. I think if we had a learning coming out of the quarter, is that we probably have the ability to push for some either higher priced goods or potentially taking some retails up.

What's made us successful for years and years is having the best bargains in retail and always maintaining our umbrella relative to mainstream retail. We're gonna focus on that for sure. We probably have gained some confidence in shifting our assortment to again, slightly higher priced goods, new goods, not like for like in higher prices. Maybe in certain targeted places, if we feel like we have merchandise categories that are margin eroding, increasing AUR a little bit to recapture some of that. We feel just really well-positioned as we start 2026. We're excited about the current growth, but there's seemingly another dozen levers that we can pull for additional growth going forward.

Regarding capital, right? The best way to probably think about it for us is maybe think about a third each for DCs and new stores and maybe 25% for store maintenance and the balance for, you know, technology enhancements to merchandising tools and initiatives and other things that are gonna support long-term growth.

That's great. Thanks, guys. Best of luck for the year.

The next question comes from the line of Ike Boruchow with Wells Fargo. Please proceed with your question.

Good afternoon. This is Juliana Duque on for Ike. Thank you for taking our question. I wanted to ask if you've seen any changes in the type of consumer shopping you've been seeing across both the brands, whether that's between the good, better, best towards branded or any other commentary you could give there. Thank you.

The quick answer I would say is no. The composition of our customer base seems to be very much intact. We've seen growth across essentially all pieces of it in terms of income levels, age, different ethnicities. To tease out any minor differences, it would be kind of unnecessary. It's been an overarching, a rising tide, I think, for essentially all customers.

Ross Stores (ROST) Q4 2026 Earnings Call Transcript

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