Ross Stores (ROST) had decent sales momentum in Q2 as channel checks suggest, but the momentum is below sell-side expectations, UBS said in a note emailed Wednesday.
The company is scheduled to release its Q2 results on Aug. 20.
The company's earnings per share could miss the Street's $1.94 view by about 7 cents, according to the note. The brokerage expects fiscal 2026 EPS guidance to narrow to $7.56-$7.68 from $7.50-$7.74.
UBS pointed to industry data showing sales growth of 11% in May, 10% in June, and 11% in July, alongside a 31% year-over-year drop in August Google search interest for the retailer.
The firm expects these trends, along with a Q2 comp at the midpoint of guidance, to lead Ross Stores to guide Q3 comp growth to a low-single-digit percentage rate, a deceleration from 17% growth in Q1.
UBS kept a neutral rating on the stock, with a $232 price target.
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