Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per
share for the 13 weeks ended May 4, 2019 of $1.15, up from $1.11
for the same period last year. Net earnings for the 2019 first
quarter were $421 million, compared to $418 million in the prior
year. These results include an approximate $.02 per share benefit
from the favorable timing of expenses that are expected to reverse
over the balance of the year. Sales for the period grew 6% to $3.8
billion, with comparable store sales up 2%.
Barbara Rentler, Chief Executive Officer, commented, “For the
first quarter, we delivered sales gains at the high end of our
guidance as well as better-than-expected earnings per share growth
despite continued underperformance in Ladies apparel. While
operating margin of 14.1% was down from the prior year, it was
above plan mainly due to higher merchandise margin. As expected,
this improvement was more than offset by increases in freight and
wage costs and the timing of packaway-related expenses that
benefited the prior year period.”
Ms. Rentler continued, “During the first quarter of fiscal 2019,
we repurchased 3.4 million shares of common stock for an aggregate
price of $320 million. As planned, we remain on track to buy back a
total of $1.275 billion in common stock during fiscal 2019.”
Looking ahead, Ms. Rentler said, “For the 13 weeks ending August
3, 2019, we are forecasting same store sales to be up 1% to 2% on
top of a 5% gain last year. Second quarter 2019 earnings per share
are projected to be $1.06 to $1.11, up from $1.04 in the prior year
period.”
Ms. Rentler continued, “Based on our first quarter results and
guidance for the second quarter, we now project earnings per share
for the 52 weeks ending February 1, 2020 to be in the range of
$4.38 to $4.52, up from $4.26 last year, which included a $.07 per
share benefit in the fourth quarter from the favorable resolution
of a tax matter.”
The Company will host a conference call on Thursday, May 23,
2019 at 4:15 p.m. Eastern time to provide additional details
concerning its first quarter results and management’s outlook for
the second quarter of fiscal 2019. 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 #6291179 until 8:00 p.m.
Eastern time on May 30, 2019, as well as on the Company’s
website.
Forward-Looking Statements:
This press release contains forward-looking statements regarding
expected sales, earnings levels, new store growth, 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 that may affect shopping
patterns and consumer demand for seasonal apparel and other
merchandise, and may result in temporary store closures and
disruptions in deliveries of merchandise to our stores; 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 trade 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 2018, and Form 10-Q
and Form 8-Ks for fiscal 2019. 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
2018 revenues of $15.0 billion. As of May 4, 2019, the Company
operates Ross Dress for Less® (“Ross”), the largest off-price
apparel and home fashion chain in the United States with 1,502
locations in 38 states, the District of Columbia, and Guam. 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 243 dd’s DISCOUNTS® in
18 states 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 ($000, except stores and per share data,
unaudited)
May 4, 2019 May 5, 2018
Sales $ 3,796,642 $ 3,588,619
Costs
and Expenses Cost of goods sold
2,701,668 2,522,219
Selling, general and administrative
558,250 524,423 Interest
income, net
(5,635 ) (503 )
Total costs and expenses
3,254,283 3,046,139 Earnings
before taxes
542,359 542,480 Provision for taxes on earnings
121,217 124,228 Net
earnings
$ 421,142 $ 418,252
Earnings per share Basic
$ 1.16 $ 1.12
Diluted
$ 1.15 $ 1.11
Weighted average shares
outstanding (000) Basic
363,085 373,797 Diluted
365,912 377,062
Stores open at end of period
1,745
1,651
Ross Stores, Inc. Condensed
Consolidated Balance Sheets ($000, unaudited)
May 4, 2019 May 5, 2018
Assets
Current Assets Cash and cash equivalents
$
1,366,592 $ 1,302,836 Accounts receivable
121,607
109,425 Merchandise inventory
1,813,773 1,895,456 Prepaid
expenses and other
160,733 146,362
Total current assets
3,462,705 3,454,079 Property and
equipment, net
2,436,372 2,369,215 Operating lease assets
2,942,980 - Other long-term assets
207,063
197,542 Total assets
$ 9,049,120
$ 6,020,836
Liabilities and Stockholders’ Equity
Current Liabilities Accounts payable
$
1,296,183 $ 1,299,145 Accrued expenses and other
450,762 435,606 Current operating lease liabilities
536,900 - Accrued payroll and benefits
220,376
209,570 Income taxes payable
89,290 77,323 Current portion
of long-term debt
- 84,981 Total
current liabilities
2,593,511 2,106,625
Long-term debt
312,552 312,105 Non-current operating lease
liabilities
2,514,530 - Other long-term liabilities
226,788 362,445 Deferred income taxes
134,213 109,373
Commitments and contingencies
Stockholders’
Equity 3,267,526 3,130,288 Total
liabilities and stockholders’ equity
$ 9,049,120
$ 6,020,836
Ross Stores, Inc. Condensed
Consolidated Statements of Cash Flows
Three Months Ended ($000, unaudited)
May 4,
2019 May 5, 2018
Cash Flows From Operating
Activities Net earnings
$ 421,142 $ 418,252 Adjustments
to reconcile net earnings to net cash provided by operating
activities: Depreciation and amortization
82,757 79,797
Stock-based compensation
19,689 23,760 Deferred income taxes
16,543 16,842 Change in assets and liabilities: Merchandise
inventory
(63,331) (253,721) Other current assets
(41,777) (46,028) Accounts payable
122,654 238,677
Other current liabilities
(108,208) (95,966) Income taxes
56,206 90,322 Operating lease assets and liabilities, net
2,855 - Other long-term, net
457 115 Net cash
provided by operating activities
508,987 472,050
Cash Flows From Investing Activities Additions to
property and equipment
(95,629) (79,793) Proceeds from
investments
517 505 Net cash used in investing
activities
(95,112) (79,288)
Cash Flows
From Financing Activities Issuance of common stock related to
stock plans
5,295 4,682 Treasury stock purchased
(50,880) (44,798) Repurchase of common stock
(320,130) (255,370) Dividends paid
(93,722)
(85,410) Net cash used in financing activities
(459,437)
(380,896) Net (decrease) increase in cash, cash
equivalents, and restricted cash and cash equivalents
(45,562) 11,866 Cash, cash equivalents, and
restricted cash and cash equivalents: Beginning of period
1,478,079 1,353,272 End of period
$ 1,432,517
$ 1,365,138 Reconciliations: Cash and cash
equivalents
$ 1,366,592 $ 1,302,836 Restricted cash and cash
equivalents included in prepaid expenses and other
11,867
8,900 Restricted cash and cash equivalents included in other
long-term assets
54,058 53,402 Total cash, cash
equivalents, and restricted cash and cash equivalents:
$
1,432,517 $ 1,365,138
Supplemental Cash Flow
Disclosures Interest paid
$ 4,219 $ 4,219 Income taxes
paid
$ 48,468 $ 17,058
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190523005768/en/
Michael HartshornGroup Executive Vice President,Chief Financial
Officer(925) 965-4503
Connie KaoVice President, Investor Relations(925)
965-4668connie.kao@ros.com
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