Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per
share for the 13 weeks ended October 28, 2023 of $1.33, up from
$1.00 per share for the 13 weeks ended October 29, 2022. Net income
for the period rose to $447 million versus $342 million last year.
Sales for the 2023 third quarter were $4.9 billion, up from $4.6
billion in the prior year, with a comparable store sales gain of
5%.
For the nine months ended October 28, 2023, earnings per share
were $3.74 on net earnings of $1.3 billion, versus $3.08 per share
on net income of $1.1 billion for the same year-to-date period in
2022. Sales for the first nine months of 2023 were $14.4 billion,
with comparable store sales up 4% over the prior year.
Barbara Rentler, Chief Executive Officer, commented, “We are
pleased that both sales and earnings outperformed our expectations
for the quarter as customers responded favorably to the terrific
values we offered throughout our stores. Operating margin for the
period was 11.2%, up from 9.8% last year, as leverage from the same
store sales gain and lower freight costs was partially offset by
higher incentives and store wages.”
Ms. Rentler added, “During the third quarter, we repurchased 2.1
million shares of common stock for an aggregate price of $239
million. We remain on track to buy back a total of $950 million in
common stock during fiscal 2023 to complete our two-year $1.9
billion repurchase program by year end.”
Fourth Quarter and Fiscal 2023
Guidance
Looking ahead, Ms. Rentler said, “We continue to face
macroeconomic volatility, persistent inflation, and more recently,
geopolitical uncertainty. In addition, we are up against our most
difficult quarterly sales comparisons versus 2022 in the fourth
quarter. As a result, we believe it is prudent to maintain a
cautious approach in forecasting our business and are reiterating
our prior sales guidance for the fourth quarter.”
Ms. Rentler continued, “While we hope to do better, we continue
to project same store sales for the 13 weeks ending January 27,
2024 to be up 1% to 2%. Earnings per share for the 14 weeks ending
February 3, 2024 are planned to be in the range of $1.56 to $1.62,
compared to $1.31 in the prior year. This guidance range includes
an approximate $0.02 per share unfavorable impact from the timing
of expenses that benefited the third quarter. Based on our
year-to-date results and our fourth quarter forecast, earnings per
share for the 53 weeks ending February 3, 2024 are now expected to
be in the range of $5.30 to $5.36 versus $4.38 last year.
Incorporated in this guidance for the fourth quarter and full year
is an estimated benefit to earnings per share of approximately
$0.16 from the 53rd week in fiscal 2023.”
Ms. Rentler concluded, “Despite the current macroeconomic and
geopolitical uncertainties, we remain confident in the resilience
of the off-price sector and our ability to operate successfully
within it. Our business model offers shoppers both value and
convenience, and we believe consumers’ heightened focus on these
important factors bodes well for us for the foreseeable
future.”
The Company will host a conference call on Thursday, November
16, 2023 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 201-612-7415, PIN #13742208 until 8:00 p.m.
Eastern time on November 24, 2023, as well as on the Company’s
website.
Forward-Looking Statements:
This press release and the related conference call remarks contain
forward-looking statements regarding, without limitation, projected
sales, costs, and earnings, planned new store growth, capital
expenditures, liquidity, and other matters. These forward-looking
statements reflect our then-current beliefs, plans, and estimates
with respect to future events and our projected financial
performance and operations, and they 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, uncertainties arising from the
macroeconomic environment, including inflation, interest rates,
housing costs, energy and fuel costs, financial and credit market
conditions, recession concerns, geopolitical conditions (including
the current Russia-Ukraine and Middle East conflicts), the COVID-19
pandemic, and other public health and public safety issues, that
affect our costs, consumer confidence, and consumer disposable
income and shopping behavior; unexpected changes in the level of
consumer spending on, or preferences for, apparel and home-related
merchandise, which could adversely affect us; competitive pressures
in the apparel and home-related merchandise retailing industry; our
need to effectively manage our inventories, markdowns, and
inventory shortage in order to achieve our planned gross margins;
risks associated with importing and selling merchandise produced in
other countries, including risks from supply chain disruption,
shipping delays, and higher than expected ocean freight costs;
unseasonable weather or extreme temperatures that may affect
shopping patterns and consumer demand for seasonal apparel and
other merchandise; our dependence on the market availability,
quantity, and quality of attractive brand name merchandise at
desirable discounts, and on the ability of our buyers to anticipate
consumer preferences and to purchase merchandise to enable us to
offer customers a wide assortment of merchandise at competitive
prices; 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; disruptions in our supply chain or in our information
systems, including from ransomware or other cyber-attacks, that
could impact our ability to process sales and to deliver product to
our stores in a timely and cost-effective manner; our need to
obtain acceptable new store sites with favorable consumer
demographics to achieve our planned new store openings; our need to
expand in existing markets and enter new geographic markets in
order to achieve planned market penetration; consumer problems or
legal 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; an adverse outcome in various
legal, regulatory, or tax matters, or the adoption of new federal
or state tax legislation that increases tax rates or adds new
taxes, that could increase our costs; damage to our corporate
reputation or brands that could adversely affect our sales and
operating results; our need to continually attract, train, and
retain associates with the retail talent necessary to execute our
off-price retail strategies; our need to effectively advertise and
market our business; changes in U.S. tax, tariff, or trade policy
regarding apparel and home-related merchandise produced in other
countries, which could adversely affect our business; possible
volatility in our revenues and earnings; a public health or public
safety crisis, demonstrations, or a natural or man-made disaster in
California or in another region where we have a concentration of
stores, offices, or a distribution center, that could harm our
business; and our need to maintain sufficient liquidity to support
our continuing operations and our new store openings. Other risk
factors are set forth in our SEC filings including without
limitation, the Form 10-K for fiscal 2022 and fiscal 2023 Form 8-Ks
and 10-Qs on file with the SEC. The factors underlying our
forecasts are dynamic and subject to change. As a result, any
forecasts or forward-looking statements speak only as of the date
they are given and do not necessarily reflect our outlook at any
other point in time. We disclaim any obligation to update or revise
these forward-looking statements.
About Ross Stores, Inc.
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100
(ROST) company headquartered in Dublin, California, with fiscal
2022 revenues of $18.7 billion. Currently, the Company operates
Ross Dress for Less® (“Ross”), the largest off-price apparel and
home fashion chain in the United States with 1,765 locations in 43
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 347 dd’s DISCOUNTS®
stores in 22 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 Nine Months
Ended ($000, except stores and per share data, unaudited)
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Sales
$
4,924,849
$
4,565,489
$
14,354,440
$
13,481,598
Costs and Expenses Cost of goods sold
3,564,268
3,424,046
10,426,241
10,020,027
Selling, general and administrative
810,470
693,367
2,364,590
2,029,926
Interest (income) expense, net
(43,319
)
(2,802
)
(111,930
)
25,561
Total costs and expenses
4,331,419
4,114,611
12,678,901
12,075,514
Earnings before taxes
593,430
450,878
1,675,539
1,406,084
Provision for taxes on earnings
146,103
108,842
410,702
341,086
Net earnings
$
447,327
$
342,036
$
1,264,837
$
1,064,998
Earnings per share Basic
$
1.34
$
1.00
$
3.76
$
3.09
Diluted
$
1.33
$
1.00
$
3.74
$
3.08
Weighted-average shares outstanding (000)
Basic
334,282
342,120
336,187
344,686
Diluted
336,261
343,720
338,107
346,212
Store count at end of period
2,112
2,019
2,112
2,019
Ross Stores, Inc. Condensed Consolidated
Balance Sheets ($000, unaudited)
October 28, 2023
October 29, 2022
Assets Current Assets Cash and cash
equivalents
$
4,499,497
$
3,906,490
Accounts receivable
171,915
168,483
Merchandise inventory
2,613,808
2,494,002
Prepaid expenses and other
206,725
192,214
Total current assets
7,491,945
6,761,189
Property and equipment, net
3,397,519
3,008,738
Operating lease assets
3,160,017
3,101,882
Other long-term assets
221,139
228,286
Total assets
$
14,270,620
$
13,100,095
Liabilities and Stockholders’ Equity
Current Liabilities Accounts payable
$
2,280,278
$
1,927,757
Accrued expenses and other
665,279
616,753
Current operating lease liabilities
680,088
656,837
Accrued payroll and benefits
509,484
251,479
Income taxes payable
20,960
11,404
Current portion of long-term debt
249,598
—
Total current liabilities
4,405,687
3,464,230
Long-term debt
2,210,073
2,455,460
Non-current operating lease liabilities
2,640,068
2,596,221
Other long-term liabilities
218,970
223,162
Deferred income taxes
212,866
214,022
Commitments and contingencies
Stockholders’
Equity
4,582,956
4,147,000
Total liabilities and stockholders’ equity
$
14,270,620
$
13,100,095
Ross Stores, Inc. Condensed Consolidated
Statements of Cash Flows Nine Months Ended
($000, unaudited)
October 28, 2023
October 29, 2022
Cash Flows From Operating Activities Net earnings
$
1,264,837
$
1,064,998
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization
300,366
290,565
Stock-based compensation
111,369
92,367
Deferred income taxes
(4,193
)
76,380
Change in assets and liabilities: Merchandise inventory
(590,313
)
(231,729
)
Other current assets
(48,803
)
(72,079
)
Accounts payable
259,105
(452,968
)
Other current liabilities
284,989
(308,202
)
Income taxes
(25,524
)
3,397
Operating lease assets and liabilities, net
8,336
8,634
Other long-term, net
5,566
1,304
Net cash provided by operating activities
1,565,735
472,667
Cash Flows From Investing Activities Additions to
property and equipment
(540,458
)
(417,901
)
Net cash used in investing activities
(540,458
)
(417,901
)
Cash Flows From Financing Activities Issuance of
common stock related to stock plans
18,590
18,298
Treasury stock purchased
(48,568
)
(45,372
)
Repurchase of common stock
(703,400
)
(718,693
)
Dividends paid
(342,132
)
(324,648
)
Net cash used in financing activities
(1,075,510
)
(1,070,415
)
Net decrease in cash, cash equivalents, and restricted cash
and cash equivalents
(50,233
)
(1,015,649
)
Cash, cash equivalents, and restricted cash and cash
equivalents: Beginning of period
4,612,241
4,982,382
End of period
$
4,562,008
$
3,966,733
Reconciliations: Cash and cash equivalents
$
4,499,497
$
3,906,490
Restricted cash and cash equivalents included in prepaid expenses
and other
13,127
11,446
Restricted cash and cash equivalents included in other long-term
assets
49,384
48,797
Total cash, cash equivalents, and restricted cash and cash
equivalents:
$
4,562,008
$
3,966,733
Supplemental Cash Flow Disclosures Interest paid
$
80,316
$
80,316
Income taxes paid
$
440,419
$
261,309
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231116719601/en/
Adam Orvos Executive Vice President, Chief Financial Officer
(925) 965-4550
Connie Kao Group Vice President, Investor Relations (925)
965-4668 connie.kao@ros.com
Grafico Azioni Ross Stores (NASDAQ:ROST)
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