Ross Stores (ROST) is having a good Friday. The off-price retailer's stock jumped more than 8% in premarket trading after the company blew past Wall Street's expectations for its second quarter, and its CEO made it clear that the chain is taking business away from its rivals.

Let's get to the numbers. Ross reported revenue of about $6.27 billion for the quarter, beating the $6.18 billion analysts were looking for. Earnings came in at $2.66 per share, crushing the $1.94 estimate. That's a big beat, and investors are rewarding the company for it.

Sales rose 13% year over year to $6.3 billion, with comparable-store sales up 10%, driven by stronger customer traffic. This marks the second consecutive quarter of double-digit sales growth, and July was the strongest month. New and returning customers, more frequent visits, and higher spending from existing shoppers all contributed to the growth.

The gains were broad-based, across merchandise categories and geographic regions. Home and cosmetics led the way in merchandise, while the Midwest was the strongest region. dd's Discounts, Ross's sister chain, also posted solid growth across categories and regions.

Margins were a big story too. Gross margin expanded 625 basis points, including a 405-basis-point benefit from tariff refunds. Lower distribution costs helped, though higher fuel prices increased freight expenses. Merchandise margin improved 110 basis points, and distribution costs declined 100 basis points, helped by the timing of packaway expenses, productivity gains, and easier year-over-year comparisons. Occupancy costs improved by 25 basis points, while higher fuel costs created a 10-basis-point freight headwind and buying costs hurt margins by 5 basis points.

Operating margin expanded 610 basis points, including the tariff refund benefit. Excluding those refunds, operating margin still improved 205 basis points from a year earlier. Inventory increased 18% as Ross stocked up to support sales growth, improve merchandise margins, and capitalize on closeout buying opportunities. The company also repurchased about 1.4 million shares for $319 million during the quarter.

Now, about that market share talk. During the earnings call, CEO Jim Conroy said Ross has been gaining ground on its off-price rivals. He noted that Ross has grown faster than each of its two major competitors over the past four quarters, saying that "mathematically we've captured more share." He added that the company remains confident it can continue gaining market share as its merchandising, marketing, and store initiatives drive stronger customer traffic and engagement.

Looking ahead, Ross raised its full-year 2026 earnings guidance to $8.61 to $8.77 per share, up from its previous range of $7.50 to $7.74. The new outlook is above the $7.79 analyst estimate. For the third quarter, the company expects earnings of $1.75 to $1.83 per share, and for the fourth quarter, $2.17 to $2.26 per share. Both ranges are above current analyst expectations.

Ross also expects third-quarter sales to increase 9% to 11%, with an operating margin of 11.7% to 12%, compared with 11.6% a year earlier. The retailer plans to open 51 stores during the third quarter, including 41 Ross locations and 10 dd's Discounts stores. For the fourth quarter, Ross expects comparable-store sales to increase 4% to 5%, despite facing a 9% growth comparison from the prior-year period.

The company also raised its 2026 store-opening target to 115 locations from 110, with plans for five to 10 relocations and closures. And it remains on track to repurchase $1.275 billion of stock in 2026 under its $2.55 billion two-year authorization.

As of premarket trading on Friday, Ross Stores shares were up 8.11% at $247.56, approaching its 52-week high of $257.00.