Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per
share for the third quarter ended October 28, 2017 of $.72, a 16%
increase from $.62 last year. Net earnings grew to $274 million, up
from $245 million in the prior year. Third quarter sales rose 8% to
$3.3 billion, with comparable store sales up 4% on top of a robust
7% increase last year.
For the first nine months of fiscal 2017, earnings per share
were $2.36, up 15% on top of an 11% gain last year. Net earnings
were $912 million, compared to $817 million in the prior year.
Sales year-to-date rose 8% to $10.1 billion, with comparable store
sales up 4% versus a 4% gain in the same period last year.
Barbara Rentler, Chief Executive Officer, commented, “Our third
quarter sales and earnings outperformed our expectations despite
being up against our toughest prior year comparisons and two major
hurricanes during the quarter. We are pleased with these strong
results, which reflect our continued market share gains in a
challenging retail environment. Operating margin of 13.3% was
better-than-expected, mainly due to a combination of higher
merchandise margin and leverage on above-plan sales.”
Ms. Rentler continued, “During the third quarter and first nine
months of fiscal 2017, we repurchased 3.6 million and 10.5 million
shares of common stock, respectively, for an aggregate price of
$219 million in the quarter and $649 million year-to-date. We
remain on track to buy back a total of $875 million in common stock
during fiscal 2017 under the two-year $1.75 billion authorization
approved by our Board of Directors in February of this year.”
Looking ahead, Ms. Rentler said, “Given our better-than-expected
trends in the third quarter, we are raising our sales expectations
for the fourth quarter. For the 13 weeks ending January 27, 2018,
comparable store sales are now forecast to increase 2% to 3% versus
a 4% gain last year. Earnings per share for the 14 weeks ending
February 3, 2018 are projected to be $.88 to $.92, up from $.77 in
the prior year period. Based on this updated guidance and our
year-to-date results, we are now planning earnings per share for
fiscal 2017 to be in the range of $3.24 to $3.28. As a reminder,
both our fourth quarter and full year guidance include an
approximate $.08 benefit to earnings per share from the 53rd week
in fiscal 2017.”
The Company will host a conference call on Thursday, November
16, 2017, at 4:15 p.m. Eastern time to provide additional details
concerning its third quarter results and management’s outlook for
the remainder of the year. A real-time audio webcast of the
conference call will be available in the Investors section of the
Company’s website, located at www.rossstores.com. An audio playback
will be available at 404-537-3406, PIN #6788429 until 8:00 p.m.
Eastern time on November 24, 2017, as well as on the Company’s
website.
Forward-Looking Statements:
This press release contains forward-looking statements regarding
expected sales, earnings levels, and other financial results in
future periods that are subject to risks and uncertainties which
could cause our actual results to differ materially from
management’s current expectations. The words “plan,” “expect,”
“target,” “anticipate,” “estimate,” “believe,” “forecast,”
“projected,” “guidance,” “outlook,” “looking ahead” and similar
expressions identify forward-looking statements. Risk factors for
Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without
limitation, competitive pressures in the apparel or home-related
merchandise retailing industry; changes in the level of consumer
spending on or preferences for apparel and home-related
merchandise; market availability, quantity, and quality of
attractive brand name merchandise at desirable discounts and our
buyers’ ability to purchase merchandise that enables us to offer
customers a wide assortment of merchandise at competitive prices;
impacts from the macro-economic environment, financial and credit
markets, and geopolitical conditions that affect consumer
confidence and consumer disposable income; our ability to
continually attract, train, and retain associates to execute our
off-price strategies; unseasonable weather trends; potential
information or data security breaches, including cyber-attacks on
our transaction processing and computer information systems, which
could result in theft or unauthorized disclosure of customer,
credit card, employee, or other private and valuable information
that we handle in the ordinary course of our business; potential
disruptions in our supply chain or information systems; issues
involving the quality, safety, or authenticity of products we sell,
which could harm our reputation, result in lost sales, and/or
increase our costs; our ability to effectively manage our
inventories, markdowns, and inventory shortage to achieve planned
gross margin; changes in U.S. tax or tariff policy regarding
apparel and home-related merchandise produced in other countries
that could adversely affect our business; volatility in revenues
and earnings; an adverse outcome in various legal, regulatory, or
tax matters; a natural or man-made disaster in California or in
another region where we have a concentration of stores, offices, or
a distribution center; unexpected issues or costs from expanding in
existing markets and entering new geographic markets; obtaining
acceptable new store sites with favorable consumer demographics;
damage to our corporate reputation or brands; effectively
advertising and marketing our brands; issues from selling and
importing merchandise produced in other countries; and maintaining
sufficient liquidity to support our continuing operations, new
store and distribution center growth plans, and stock repurchase
and dividend programs. Other risk factors are set forth in our SEC
filings including without limitation, the Form 10-K for fiscal
2016, and Form 10-Qs and 8-Ks for fiscal 2017. The factors
underlying our forecasts are dynamic and subject to change. As a
result, our forecasts speak only as of the date they are given and
do not necessarily reflect our outlook at any other point in time.
We do not undertake to update or revise these forward-looking
statements.
Ross Stores, Inc. is an S&P 500, Fortune 500 and Nasdaq 100
(ROST) company headquartered in Dublin, California, with fiscal
2016 revenues of $12.9 billion. The Company operates Ross Dress for
Less® (“Ross”), the largest off-price apparel and home fashion
chain in the United States with 1,412 locations in 37 states, the
District of Columbia and Guam as of October 28, 2017. Ross offers
first-quality, in-season, name brand and designer apparel,
accessories, footwear, and home fashions for the entire family at
savings of 20% to 60% off department and specialty store regular
prices every day. The Company also operates 215 dd’s DISCOUNTS® in
16 states as of October 28, 2017 that feature a more
moderately-priced assortment of first-quality, in-season, name
brand apparel, accessories, footwear, and home fashions for the
entire family at savings of 20% to 70% off moderate department and
discount store regular prices every day. Additional information is
available at www.rossstores.com.
Ross Stores, Inc. Condensed Consolidated
Statements of Earnings
Three Months Ended Nine Months Ended ($000, except
stores and per share data, unaudited)
October 28,
2017
October 29, 2016
October 28, 2017
October 29, 2016
Sales $ 3,328,894 $ 3,086,687
$
10,066,926 $ 9,356,599
Costs and Expenses Cost
of goods sold
2,369,148 2,206,092
7,120,056 6,634,142
Selling, general and administrative
517,297 490,171
1,490,392 1,396,606 Interest expense, net
1,780 4,156
7,290
12,733 Total costs and expenses
2,888,225 2,700,419
8,617,738 8,043,481 Earnings before taxes
440,669 386,268
1,449,188 1,313,118 Provision for
taxes on earnings
166,220 141,722
537,182 496,032 Net earnings
$ 274,449 $ 244,546
$
912,006 $ 817,086
Earnings per share
Basic
$ 0.72 $ 0.63
$ 2.38 $ 2.08
Diluted
$ 0.72 $ 0.62
$ 2.36 $ 2.06
Weighted average shares outstanding (000) Basic
379,432 390,870
382,959 393,412 Diluted
382,132 393,372
385,823 396,056
Dividends
Cash dividends declared per share
$ 0.1600 $ 0.1350
$ 0.4800 $ 0.4050
Stores open at end of period
1,627 1,535
1,627 1,535
Ross Stores, Inc. Condensed Consolidated Balance
Sheets ($000, unaudited)
October
28, 2017 October 29, 2016
Assets
Current Assets Cash and cash equivalents
$
1,144,169 $ 878,811 Short-term investments
518 803
Accounts receivable
103,071 91,355 Merchandise inventory
1,840,225 1,763,745 Prepaid expenses and other
147,962 140,662 Total current assets
3,235,945 2,875,376 Property and equipment, net
2,348,186 2,310,670 Long-term investments
715 1,316
Other long-term assets
182,132 162,525
Total assets
$ 5,766,978 $ 5,349,887
Liabilities and Stockholders’ Equity Current
Liabilities Accounts payable
$ 1,289,620 $
1,149,136 Accrued expenses and other
445,728 439,570 Accrued
payroll and benefits
320,894 299,238
Total current liabilities
2,056,242 1,887,944
Long-term debt
396,848 396,376 Other long-term liabilities
325,587 293,997 Deferred income taxes
129,782 122,048
Commitments and contingencies
Stockholders’
Equity 2,858,519 2,649,522 Total
liabilities and stockholders’ equity
$ 5,766,978
$ 5,349,887
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended ($000, unaudited)
October 28, 2017 October 29, 2016
Cash Flows From Operating
Activities
Net earnings
$ 912,006 $ 817,086
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
227,255 224,136 Stock-based
compensation
64,937 56,489 Deferred income taxes
9,074 (8,040 ) Change in assets and liabilities: Merchandise
inventory
(327,339 ) (344,641 ) Other current assets
(62,610 ) (43,045 ) Accounts payable
271,526
213,168 Other current liabilities
51,567 100,385 Other
long-term, net
19,217 13,690
Net cash provided by operating activities
1,165,633 1,029,228
Cash Flows From Investing Activities Additions to property
and equipment
(266,863 ) (220,442 ) Decrease in
restricted cash and investments
828 3,496 Proceeds from
investments
38 914 Net
cash used in investing activities
(265,997 )
(216,032 )
Cash Flows From Financing
Activities Excess tax benefit from stock-based compensation
-
24,558 Issuance of common stock related to stock plans
13,668 14,182 Treasury stock purchased
(45,440
) (42,870 ) Repurchase of common stock
(648,835
) (530,303 ) Dividends paid
(186,459 )
(161,554 ) Net cash used in financing activities
(867,066 ) (695,987 ) Net
increase in cash and cash equivalents
32,570 117,209
Cash and cash equivalents:
Beginning of period
1,111,599 761,602 End of
period
$ 1,144,169 $ 878,811
Supplemental Cash Flow Disclosures Interest paid
$ 13,271 $ 13,271 Income taxes paid
$
552,720 $ 482,801
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171116006391/en/
Ross Stores, Inc.Michael Hartshorn, 925-965-4503Group Senior
Vice President, Chief Financial OfficerorConnie Kao,
925-965-4668Vice President, Investor
Relationsconnie.kao@ros.com
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