ROSS STORES, INC. DUBLIN, Calif., Aug. 18, 2016 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the second quarter ended July 30, 2016 of $.71, a 13% increase on top of an 11% gain in the prior year. Net earnings for the current year period grew to $282 million, up from $259 million last year. Sales for the 2016 second quarter rose 7% to $3.181 billion, with comparable store sales up 4% on top of 4% growth in the prior year.
For the first six months of fiscal 2016, earnings per share were $1.44, up 9% on top of a 15% increase last year. Net earnings were $573 million, up from $541 million in the prior year. Sales for the first half of 2016 rose 6% to $6.270 billion, with comparable store sales up 3% versus a 5% gain in the same period last year.
Barbara Rentler, Chief Executive Officer, commented, "Both sales and earnings results in the second quarter were ahead of our forecast. Higher merchandise gross margin during the quarter drove a 50 basis point increase in operating margin to 14.4%, up from 13.9% in the same period last year."
Ms. Rentler continued, "During the second quarter and first six months of fiscal 2016, we repurchased 3.1 million and 6.2 million shares of common stock, respectively, for an aggregate price of $176 million in the quarter and $352 million year-to-date. As planned, we expect to buy back a total of $700 million in common stock during fiscal 2016 to complete the two-year $1.4 billion authorization approved by our Board of Directors in February 2015."
Looking ahead, Ms. Rentler said, "For the third quarter ending October 29, 2016, we are forecasting a same store sales gain of 1% to 2% on top of a 3% increase in the prior year, and earnings per share of $.52 to $.55, compared to $.53 in last year's third quarter. For the fourth quarter ending January 28, 2017, we are also projecting same store sales to grow 1% to 2% versus a 4% increase last year, with earnings per share expected to be $.73 to $.76, up from $.66 in the 2015 fourth quarter. Based on our first half results and second half guidance, fiscal 2016 earnings per share are now planned to increase 7% to 10% to $2.69 to $2.75, on top of a 14% gain last year."
The Company will host a conference call on Thursday, August 18, 2016 at 4:15 p.m. Eastern time to provide additional details concerning its second 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 #60158976 until 8:00 p.m. Eastern time on August 25, 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 Form 10-Q 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 1,317 locations in 34 states, the District of Columbia and Guam as of July 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 184 dd's DISCOUNTS(®) in 14 states as of July 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.
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
Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
Three Months Ended Six Months Ended
------------------ ----------------
($000, except stores and
per share data,
unaudited) July 30, 2016 August 1, 2015 July 30, 2016 August 1, 2015
------------------------ ------------- -------------- ------------- --------------
Sales $3,180,917 $2,968,270 $6,269,912 $5,906,418
Costs and Expenses
Cost of goods
sold 2,251,845 2,119,480 4,428,050 4,186,935
Selling,
general and
administrative 469,511 435,226 906,435 844,524
Interest
expense, net 4,213 1,652 8,577 3,655
Total costs and expenses 2,725,569 2,556,358 5,343,062 5,035,114
Earnings before taxes 455,348 411,912 926,850 871,304
Provision for taxes on
earnings 173,442 153,273 354,310 330,460
Net earnings $281,906 $258,639 $572,540 $540,844
======== ======== ======== ========
Earnings per share
Basic $0.72 $0.64 $1.45 $1.33
Diluted $0.71 $0.63 $1.44 $1.32
Weighted average shares
outstanding (000)
Basic 393,568 404,760 394,684 406,211
Diluted 395,930 407,693 397,381 409,562
Dividends
Cash
dividends
declared per
share $0.1350 $0.1175 $0.2700 $0.2350
Stores open at end of
period 1,501 1,424 1,501 1,424
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000,
unaudited) July 30, 2016 August 1, 2015
----------- ------------- --------------
Assets
Current
Assets
Cash and
cash
equivalents $927,718 $630,288
Short-term
investments 1,213 999
Accounts
receivable 97,139 88,443
Merchandise
inventory 1,560,209 1,509,752
Prepaid
expenses
and other 127,401 129,819
Total current assets 2,713,680 2,359,301
Property
and
equipment,
net 2,310,481 2,289,478
Long-term
investments 1,325 2,613
Other
long-
term
assets 168,748 162,180
Total
assets $5,194,234 $4,813,572
========== ==========
Liabilities
and
Stockholders'
Equity
Current
Liabilities
Accounts
payable $1,125,836 $1,044,875
Accrued
expenses
and other 397,150 405,629
Accrued
payroll and
benefits 228,195 225,153
Total current
liabilities 1,751,181 1,675,657
Long-term
debt 396,259 395,793
Other
long-
term
liabilities 296,867 287,406
Deferred
income
taxes 135,597 68,202
Commitments
and
contingencies
Stockholders'
Equity 2,614,330 2,386,514
Total
liabilities
and
stockholders'
equity $5,194,234 $4,813,572
========== ==========
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Six Months Ended
----------------
($000, unaudited) July 30, 2016 August 1, 2015
---------------- ------------- --------------
Cash Flows From Operating
Activities
Net earnings $572,540 $540,844
Adjustments to reconcile net
earnings to net cash
provided by operating activities:
Depreciation and
amortization 148,630 128,729
Stock-based
compensation 36,206 29,881
Deferred income
taxes 5,509 (5,528)
Tax benefit from
equity issuance 22,682 37,431
Excess tax
benefit from
stock-based
compensation (22,682) (37,352)
Change in assets
and
liabilities:
Merchandise inventory (141,105) (137,077)
Other current assets (34,773) (38,097)
Accounts payable 192,610 64,802
Other current liabilities (13,108) 111
Other long-term, net 13,045 6,627
------ -----
Net cash provided by operating
activities 779,554 590,371
------- -------
Cash Flows From Investing
Activities
Additions to property and
equipment (147,426) (193,108)
Increase in restricted cash and
investments (143) (73)
Purchases of investments - (718)
Proceeds from investments 514 602
Net cash used in investing
activities (147,055) (193,297)
-------- --------
Cash Flows From Financing
Activities
Excess tax benefit from stock-
based compensation 22,682 37,352
Issuance of common stock related
to stock plans 9,862 11,312
Treasury stock purchased (39,328) (63,601)
Repurchase of common stock (351,515) (351,515)
Dividends paid (108,084) (96,942)
Net cash used in financing
activities (466,383) (463,394)
-------- --------
Net increase (decrease) in cash
and cash equivalents 166,116 (66,320)
Cash and cash equivalents:
Beginning of period 761,602 696,608
------- -------
End of period $927,718 $630,288
======== ========
Supplemental Cash Flow Disclosures
Interest paid $9,053 $8,982
Income taxes paid $313,142 $322,294
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ross-stores-reports-second-quarter-earnings-issues-second-half-2016-guidance-300315649.html
SOURCE Ross Stores, Inc.
