ROSS STORES, INC. DUBLIN, Calif., May 21, 2015 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share of $1.37 for the first quarter ended May 2, 2015, up from $1.15 in the prior year. Net earnings grew to $282 million, compared to $244 million for the same period in 2014. These earnings results include a benefit of about $.04 per share mainly from the favorable timing of packaway-related costs that are expected to reverse in subsequent quarters. Adjusting for this expense timing, first quarter 2015 earnings per share rose 16% over the prior year period.
Sales for the fiscal 2015 first quarter rose 10% to $2.938 billion, with comparable store sales up 5% over the prior year.
Barbara Rentler, Chief Executive Officer, commented, "We are pleased with our better-than-expected sales and earnings in the first quarter. Our results continue to benefit from value-focused customers responding favorably to our fresh and exciting assortments of name brand bargains. Operating margin for the first quarter grew to 15.7%, up from 14.6% in the prior year, driven by a combination of higher merchandise margin, strong expense controls, and the aforementioned favorable timing of packaway-related costs."
Ms. Rentler continued, "During the first quarter of fiscal 2015, we repurchased 1.7 million shares of common stock for an aggregate price of $176 million. As planned, we expect to buy back a total of $700 million in common stock during fiscal 2015 under the new two-year $1.4 billion authorization approved by our Board of Directors in February of this year.
Looking ahead, Ms. Rentler said, "For the second quarter ending August 1, 2015, we are forecasting same store sales to increase 2% to 3% and earnings per share of $1.19 to $1.24, up from $1.14 in the prior year period. Adjusting for the recently announced two-for-one stock split that becomes effective June 11, 2015, second quarter earnings per share are forecast to be $.59 to $.62, up from $.57 in the prior year period."
Based on the Company's first quarter results and guidance for the second quarter, earnings per share for fiscal 2015 are now projected to be in the range of $4.72 to $4.87, compared to our initial guidance of $4.60 to $4.80. On a split-adjusted basis, earnings per share for the year are forecast to be $2.36 to $2.44, up 7% to 10% from $2.21 in fiscal 2014.
The Company will host a conference call on Thursday, May 21, 2015 at 4:15 p.m. Eastern time to provide additional details concerning its first quarter results and management's outlook and plans for the second quarter of fiscal 2015. 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 #38515836 until 8:00 p.m. Eastern time on May 28, 2015, as well as on the Company's website.
Forward-Looking Statements: This press release on our corporate website 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," "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 or home-related merchandise; impacts from the macro-economic environment and financial and credit markets that affect consumer disposable income and consumer confidence, including but not limited to interest rates, recession, inflation, deflation, energy costs, tax rates and policy, unemployment trends, and fluctuating commodity costs; changes in geopolitical and geoeconomic conditions; unseasonable weather trends; potential disruptions in supply chain or information systems; lower than planned gross margin, including higher than planned markdowns and higher than expected inventory shortage; greater than planned operating costs; our ability to continue to purchase attractive brand name merchandise at desirable discounts; attracting and retaining personnel with the retail talent necessary to execute our strategies; effectively operating and continually upgrading our various supply chain, core merchandising and other information systems; improving our merchandising and transaction processing capabilities and the reliability and security of our data communications systems through the implementation of new processes and systems enhancements; effectively protecting against security breaches, including cyber-attacks on our transaction processing and computer information systems, that could result in the theft, transfer or unauthorized disclosure of customer, credit card, employee or other private and valuable information that we collect and process in the ordinary course of our business, and avoiding resulting damage to our reputation, loss of customer confidence, exposure to litigation and regulatory action, unanticipated costs and disruption of our operations; obtaining acceptable new store locations and improving new store sales and profitability, especially in newer regions and markets; adding capacity to our existing distribution centers and building out planned additional distribution centers timely and cost effectively; and achieving and maintaining targeted levels of productivity and efficiency in our existing and new distribution centers. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2014 and 8-Ks for fiscal 2015. 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 2014 revenues of $11.0 billion. The Company operates Ross Dress for Less(®) ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,242 locations in 33 states, the District of Columbia and Guam as of May 2, 2015. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20% to 60% off department and specialty store regular prices. The Company also operates 157 dd's DISCOUNTS(®) in 15 states as of May 2, 2015 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 everyday savings of 20% to 70% off moderate department and discount store regular prices. Additional information is available at www.rossstores.com.
Contact: Michael Hartshorn Connie Wong
--------
Group Senior Vice President, Senior Director, Investor Relations
Chief Financial Officer (925) 965-4668
(925) 965-4503 connie.wong@ros.com
Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
Three Months Ended
------------------
($000, except stores and per
share data, unaudited) May 2, 2015 May 3, 2014
----------------------------- ----------- -----------
Sales $2,938,148 $2,680,593
Costs and Expenses
2,067,455 1,908,184
Cost of goods sold
409,298 379,802
Selling, general and
administrative
2,003 (104)
Interest expense (income), net
2,478,756 2,287,882
Total costs and expenses
Earnings before taxes 459,392 392,711
Provision for taxes on earnings 177,187 148,798
Net earnings $282,205 $243,913
======== ========
Earnings per share
$1.38 $1.17
Basic
$1.37 $1.15
Diluted
Weighted average shares
outstanding (000)
203,827 208,949
Basic
205,693 211,515
Diluted
Dividends
$0.235 $0.200
Cash dividends declared per
share
Stores open at end of period 1,399 1,309
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000, unaudited) May 2, 2015 May 3, 2014
---------------- ----------- -----------
Assets
Current Assets
$761,356 $595,950
Cash and cash
equivalents
500 -
Short-term
investments
88,258 84,492
Accounts receivable
1,504,281 1,250,759
Merchandise inventory
119,381 118,751
Prepaid expenses and
other
12,590 13,070
Deferred income taxes
2,486,366 2,063,022
Total current assets
Property and
equipment, net 2,276,747 1,924,038
Long-term investments 3,141 3,670
Other long-term assets 169,795 160,558
Total assets $4,936,049 $4,151,288
========== ==========
Liabilities and
Stockholders' Equity
Current Liabilities
$1,128,808 $930,576
Accounts payable
389,804 352,559
Accrued expenses and
other
198,081 171,535
Accrued payroll and
benefits
108,314 121,683
Income taxes payable
1,825,007 1,576,353
Total current
liabilities
Long-term debt 395,677 149,694
Other long-term
liabilities 296,490 286,672
Deferred income taxes 85,376 63,291
Commitments and
contingencies
Stockholders' Equity 2,333,499 2,075,278
Total liabilities and
stockholders' equity $4,936,049 $4,151,288
========== ==========
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended
------------------
($000,
unaudited) May 2, 2015 May 3, 2014
----------- ----------- -----------
Cash Flows
From
Operating
Activities
Net earnings $282,205 $243,913
Adjustments
to reconcile
net earnings
to net cash
provided by
operating
activities:
63,316 56,465
Depreciation
and
amortization
14,288 12,035
Stock-based
compensation
(944) 1,577
Deferred
income taxes
37,320 23,141
Tax benefit
from equity
issuance
(37,255) (22,943)
Excess tax
benefit from
stock-based
compensation
Change in
assets and
liabilities:
(131,606) 6,396
Merchandise
inventory
(27,539) (36,623)
Other current
assets
143,038 157,254
Accounts
payable
63,217 71,446
Other current
liabilities
7,948 (8,084)
Other long-
term, net
413,988 504,577
Net cash
provided by
operating
activities
Cash Flows
From
Investing
Activities
Additions to
property and
equipment (106,928) (148,700)
Increase in
restricted
cash and
investments (9) (6,980)
Purchases of
investments (718) -
Proceeds from
investments 601 12,022
(107,054) (143,658)
Net cash used
in investing
activities
Cash Flows
From
Financing
Activities
Excess tax
benefit from
stock-based
compensation 37,255 22,943
Issuance of
common stock
related to
stock plans 7,036 5,668
Treasury
stock
purchased (61,977) (35,471)
Repurchase of
common stock (175,757) (138,696)
Dividends
paid (48,743) (42,581)
(242,186) (188,137)
Net cash used
in financing
activities
Net increase
in cash and
cash
equivalents 64,748 172,782
Cash and cash
equivalents:
696,608 423,168
Beginning of
period
$761,356 $595,950
End of period
Supplemental
Cash Flow
Disclosures
Interest paid $4,148 $ -
Income taxes
paid $43,302 $28,936
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ross-stores-reports-first-quarter-earnings-issues-second-quarter-2015-guidance-300087564.html
SOURCE Ross Stores, Inc.
