Q2 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Total Sales | $6.3 billion | up 13% |
| Comparable Store Sales | 10% | Not stated |
| Net Income | $851 million | vs $508 million |
| Earnings Per Share | $2.66 | vs $1.56 |
| Operating Margin | Increased 610 basis points | Not stated |
Guidance and outlook
- Third quarter comparable store sales are forecasted to increase 6% to 7%.
- Third quarter earnings per share are expected to be $1.75 to $1.83.
- Fourth quarter comparable store sales are expected to increase 4% to 5%.
- Fourth quarter earnings per share are planned to be $2.17 to $2.26.
- Full-year earnings per share are now forecast to be $8.61 to $8.77.
How management sounded
Positive (+7 on our -10 to +10 scale). Management raised guidance for the third and fourth quarters and expressed confidence in the early-stage growth initiatives. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Momentum Drivers
Asked: What drove the top-line momentum and exit rate strength?
Answer: Growth was driven by increased transactions from new customers, returning lapsed customers, and existing customers shopping more frequently.
Growth Initiatives
Asked: Which initiatives have the most runway for future growth?
Answer: Management stated that merchandising, marketing, and store experience initiatives are all in the early innings of implementation.
Customer Profile
Asked: Are new customers higher income in nature?
Answer: No, the new customer cohort mirrors the demographics of the current customer base across all income, age, and ethnicity groups.
Vendor Relationships
Asked: How has the vendor flywheel evolved?
Answer: Stronger growth and improved in-store presentation have deepened partnerships with existing vendors and attracted new suppliers.
What to watch before the next call
- The impact of fuel prices on domestic freight costs.
- Execution of growth initiatives across the store base.
- Performance of back-to-school and holiday seasons against tougher year-over-year comparisons.
