ROSS STORES, INC. DUBLIN, Calif., May 19, 2016 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 13 weeks ended April 30, 2016 of $.73, for a 6% gain on top of a robust 19% increase in the prior year period. Net earnings for the 2016 first quarter were $291 million, up from $282 million last year. Sales increased 5% to $3.089 billion, with comparable store sales up 2% on top of a strong 5% gain in the first quarter of 2015.
Barbara Rentler, Chief Executive Officer, commented, "Even though we faced our strongest prior year comparisons, sales performed at the high end of guidance, while earnings per share were slightly above our targeted range. Operating margin for the period of 15.4% was down from last year, but slightly above plan, mainly due to higher merchandise margins that partially offset the expected impact from the unfavorable timing of packaway-related costs."
Ms. Rentler said, "During the first quarter of fiscal 2016, we repurchased 3.1 million shares of common stock for an aggregate price of $176 million. This keeps us on track to buy back a total of $700 million in common stock during fiscal 2016, which would complete the two-year $1.4 billion authorization approved by our Board of Directors in February 2015."
Looking ahead, Ms. Rentler commented, "We continue to forecast same store sales for the second quarter ending July 30, 2016 to be up 1% to 2%, on top of a 4% gain last year, with earnings per share of $.64 to $.67, up from $.63 in the prior year period. Based on our first quarter results and guidance for the second quarter, we now project earnings per share for fiscal 2016 to be in the range of $2.63 to $2.72, compared to $2.51 last year."
The Company will host a conference call on Thursday, May 19, 2016 at 4:15 p.m. Eastern time to provide additional details concerning its first quarter results and management's outlook and guidance for the second quarter of fiscal 2016. 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 #2995802 until 8:00 p.m. Eastern time on May 26, 2016, 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," "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; 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 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 - such breaches of our data security, or our failure or delay in detecting and mitigating a loss of personal or business information, could result in damage to our reputation, loss of customer confidence, violation (or alleged violation) of applicable laws, and could expose us to civil claims, litigation and regulatory action, and to unanticipated costs and disruption of our operations; potential disruptions in our supply chain or information systems; issues involving the quality, safety, or authenticity of products we sell; our ability to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margin; volatility in revenues and earnings; an adverse outcome in various legal, regulatory, or tax matters; natural or man-made disaster in California or in another region where we have a concentration of stores or a distribution center; increase in our labor costs; unexpected issues or costs from expanding in existing markets and entering new geographic markets; obtaining acceptable new store sites with favorable demographics; damage to our corporate reputation or brands; issues from importing merchandise from 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 2015 and 8-Ks for fiscal 2016. 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 2015 revenues of $11.9 billion. The Company operates Ross Dress for Less(®) ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,295 locations in 34 states, the District of Columbia and Guam as of April 30, 2016. 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 178 dd's DISCOUNTS(®) in 15 states as of April 30, 2016 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) April 30, 2016 May 2, 2015
------------------------------- -------------- -----------
Sales $3,088,995 $2,938,148
Costs and Expenses
Cost of goods
sold 2,176,205 2,067,455
Selling,
general and
administrative 436,924 409,298
Interest
expense, net 4,364 2,003
Total costs and expenses 2,617,493 2,478,756
Earnings before taxes 471,502 459,392
Provision for taxes on
earnings 180,868 177,187
Net earnings $290,634 $282,205
======== ========
Earnings per share
Basic $0.73 $0.69
Diluted $0.73 $0.69
Weighted average shares
outstanding (000)
Basic 395,799 407,653
Diluted 398,812 411,386
Dividends
Cash
dividends
declared per
share $0.1350 $0.1175
Stores open at end of
period 1,473 1,399
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000,
unaudited) April 30, 2016 May 2, 2015
----------- -------------- -----------
Assets
Current
Assets
Cash and cash
equivalents $910,025 $761,356
Short-term
investments 1,727 500
Accounts
receivable 96,244 88,258
Merchandise
inventory 1,498,449 1,504,281
Prepaid
expenses and
other 122,678 119,381
Total current assets 2,629,123 2,473,776
Property
and
equipment,
net 2,318,456 2,276,747
Long-term
investments 1,333 3,141
Other
long-
term
assets 165,265 169,795
Total
assets $5,114,177 $4,923,459
========== ==========
Liabilities
and
Stockholders'
Equity
Current
Liabilities
Accounts
payable $1,056,257 $1,128,808
Accrued
expenses and
other 382,107 389,804
Accrued
payroll and
benefits 201,830 198,081
Income taxes
payable 110,702 108,314
Total current
liabilities 1,750,896 1,825,007
Long-term
debt 396,142 395,677
Other
long-
term
liabilities 286,897 296,490
Deferred
income
taxes 140,801 72,786
Commitments
and
contingencies
Stockholders'
Equity 2,539,441 2,333,499
Total
liabilities
and
stockholders'
equity $5,114,177 $4,923,459
========== ==========
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended
------------------
($000, unaudited) April 30, 2016 May 2, 2015
---------------- -------------- -----------
Cash Flows From Operating
Activities
Net earnings $290,634 $282,205
Adjustments to reconcile net
earnings to net cash
provided by operating activities:
Depreciation and
amortization 73,878 63,316
Stock-based
compensation 17,716 14,288
Deferred income
taxes 10,713 (944)
Tax benefit from
equity issuance 20,538 37,320
Excess tax
benefit from
stock-based
compensation (20,538) (37,255)
Change in assets
and
liabilities:
Merchandise inventory (79,345) (131,606)
Other current assets (29,150) (27,539)
Accounts payable 123,886 143,038
Other current liabilities 54,415 63,217
Other long-term, net 6,333 7,948
----- -----
Net cash provided by operating
activities 469,080 413,988
------- -------
Cash Flows From Investing
Activities
Additions to property and equipment (79,724) (106,928)
Increase in restricted cash and
investments (44) (9)
Purchases of investments - (718)
Proceeds from investments - 601
Net cash used in investing
activities (79,768) (107,054)
------- --------
Cash Flows From Financing
Activities
Excess tax benefit from stock-
based compensation 20,538 37,255
Issuance of common stock related to
stock plans 5,500 7,036
Treasury stock purchased (36,933) (61,977)
Repurchase of common stock (175,758) (175,757)
Dividends paid (54,236) (48,743)
Net cash used in financing
activities (240,889) (242,186)
-------- --------
Net increase in cash and cash
equivalents 148,423 64,748
Cash and cash equivalents:
Beginning of period 761,602 696,608
------- -------
End of period $910,025 $761,356
======== ========
Supplemental Cash Flow Disclosures
Interest paid $4,219 $4,148
Income taxes paid $26,763 $43,302
Contact: Michael Hartshorn Connie Kao
--------
Group Senior Vice President, Vice President, Investor Relations
Chief Financial Officer (925) 965-4668
(925) 965-4503 connie.kao@ros.com
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SOURCE Ross Stores, Inc.
