Stock-Based Compensation

3 Months Ended

May 02, 2026

Share-Based Payment Arrangement [Abstract]

Restricted stock awards. The Company grants shares of restricted stock and restricted stock units to directors, officers, and key employees. The fair value of shares of restricted stock and restricted stock units at the date of grant is amortized to expense over the vesting period of generally three to five years.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of a performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally three years from the date the performance award was granted.

Restricted stock awards and performance awards are collectively referred to as stock awards.

A summary of stock awards activity for the three month period ended May 2, 2026, is presented below:


	Number of shares (000)	Weighted-average grant date fair value
Unvested at January 31, 2026	3,814	$	125.38
Awarded	598	211.93
Released	(1,356)	114.28
Forfeited	(53)	137.96
Unvested at May 2, 2026	3,003	$	147.40

The unamortized stock award compensation expense at May 2, 2026 and May 3, 2025 was $271.4 million and $260.3 million, respectively, which are each expected to be recognized over a weighted-average remaining period of 2.1 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the Internal Revenue Service (“IRS”) annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.

For the three month periods ended May 2, 2026 and May 3, 2025, the Company recognized stock-based compensation expense as follows:


	Three Months Ended
($000)	May 2, 2026		May 3, 2025
Restricted stock	$	24,546	$	26,349
Performance awards	33,405		11,862
Employee stock purchase plan	1,169		1,085
Total	$	59,120	$	39,296

Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three month periods ended May 2, 2026 and May 3, 2025 was as follows:


	Three Months Ended
Statements of Earnings Classification ($000)	May 2, 2026		May 3, 2025
Cost of goods sold	$	22,174	$	17,603
Selling, general and administrative	36,946		21,693
Total	$	59,120	$	39,296

The tax benefits related to stock-based compensation expense for the three month periods ended May 2, 2026 and May 3, 2025 were $10.2 million and $6.6 million, respectively.

2026 Equity Incentive Plan. At the Company’s Annual Meeting on May 20, 2026, the stockholders approved the Ross Stores, Inc. 2026 Equity Incentive Plan (“2026 Plan”) which replaced the Company’s 2017 Equity Incentive Plan (“Predecessor Plan”). The 2026 Plan is authorized to have an initial reserve of approximately 15.8 million shares (subject to adjustment in accordance with the plan). The initial reserve represents an increase of 9.0 million shares from the total number of shares that remained available for issuance under the Predecessor Plan. The 2026 Plan became immediately effective upon approval and no further awards will be granted under the Predecessor Plan, which was terminated.