Provides Second Quarter and Updated Fiscal
2023 Guidance
Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per
share for the 13 weeks ended April 29, 2023 of $1.09 on net
earnings of $371 million. These results compare to earnings per
share of $0.97 on net income of $338 million for the 13 weeks ended
April 30, 2022. Sales for the first quarter of 2023 were $4.5
billion, up from $4.3 billion in the prior year period. Comparable
store sales were up 1%.
Barbara Rentler, Chief Executive Officer, commented, “Despite
continued inflationary pressures impacting our low-to-moderate
income customers, first quarter sales were relatively in line with
our expectations. Operating margin for the period was 10.1%, down
from 10.8% in 2022, primarily reflecting higher incentive
compensation versus last year when we underperformed our
expectations.”
Ms. Rentler continued, “During the first quarter of fiscal 2023,
we repurchased 2.2 million shares of common stock for an aggregate
price of $234 million. As planned, we remain on track to buy back a
total of $950 million in common stock during fiscal 2023.”
Looking ahead, Ms. Rentler commented, “For the 13 weeks ending
July 29, 2023, comparable store sales are projected to be
relatively flat. Earnings per share for this year’s second quarter
are forecast to be $1.07 to $1.14 versus $1.11 for the same period
last year.”
She continued, “There remains a high level of uncertainty in
today’s macro-economic and geopolitical environments. In addition,
prolonged inflationary pressures continue to negatively impact our
low-to-moderate income customers’ discretionary spend. As such, we
remain focused on delivering the most compelling values possible to
maximize our opportunities for growth.”
Ms. Rentler concluded, “Based on our first quarter results and
guidance for the second quarter, comparable store sales for the 52
weeks ending January 27, 2024, are still planned to be relatively
flat. We now project earnings per share for the 53 weeks ending
February 3, 2024 to be $4.77 to $4.99 compared to $4.38 for the 52
weeks ended January 28, 2023. This guidance includes an estimated
benefit to full year 2023 earnings per share of approximately $0.15
from the 53rd week.”
The Company will host a conference call on Thursday, May 18,
2023 at 4:15 p.m. Eastern time to provide additional details
concerning its first quarter results and management’s outlook for
the second quarter and fiscal year 2023. 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 #13738510 until
8:00 p.m. Eastern time on May 25, 2023, as well as on the Company’s
website.
Forward-Looking Statements:
This press release and the related conference call remarks contains
a number of 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, operations, 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,
the uncertainties and potential for the recurrence of significant
business disruptions arising from the macroeconomic environment,
including inflation, interest rates, fears concerning the current
federal debt ceiling negotiations, housing costs, energy and fuel
costs, financial and credit market conditions, recession concerns,
geopolitical conditions (including the current Russia-Ukraine
conflict), the COVID-19 pandemic, or public health and public
safety issues, that affect our costs, consumer confidence, and
consumer disposable income; 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 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; an
additional public health or public safety crisis, demonstrations,
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; 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 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.
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 1,704 locations in 40
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 330 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 ($000, except
stores and per share data, unaudited)
April 29, 2023
April 30, 2022
Sales
$
4,494,686
$
4,333,100
Costs and Expenses Cost of goods sold
3,292,606
3,196,446
Selling, general and administrative
746,222
669,496
Interest (income) expense, net
(31,397)
17,696
Total costs and expenses
4,007,431
3,883,638
Earnings before taxes
487,255
449,462
Provision for taxes on earnings
116,064
111,017
Net earnings
$
371,191
$
338,445
Earnings per share Basic
$
1.10
$
0.98
Diluted
$
1.09
$
0.97
Weighted-average shares outstanding (000)
Basic
338,049
347,053
Diluted
340,044
348,820
Store count at end of period
2,034
1,951
Ross Stores, Inc. Condensed Consolidated Balance
Sheets ($000, unaudited)
April 29, 2023
April 30, 2022
Assets Current Assets Cash and cash
equivalents
$
4,416,480
$
4,015,567
Accounts receivable
170,816
164,071
Merchandise inventory
2,241,735
2,673,551
Prepaid expenses and other
210,597
194,813
Total current assets
7,039,628
7,048,002
Property and equipment, net
3,224,733
2,887,926
Operating lease assets
3,122,474
3,057,641
Other long-term assets
232,069
240,129
Total assets
$
13,618,904
$
13,233,698
Liabilities and Stockholders’ Equity
Current Liabilities Accounts payable
$
2,061,529
$
2,175,350
Accrued expenses and other
607,294
582,792
Current operating lease liabilities
654,709
635,799
Accrued payroll and benefits
299,465
272,760
Income taxes payable
158,170
89,361
Total current liabilities
3,781,167
3,756,062
Long-term debt
2,457,561
2,453,367
Non-current operating lease liabilities
2,619,466
2,567,286
Other long-term liabilities
222,463
236,211
Deferred income taxes
227,851
166,875
Commitments and contingencies
Stockholders’
Equity
4,310,396
4,053,897
Total liabilities and stockholders’ equity
$
13,618,904
$
13,233,698
Ross Stores, Inc. Condensed Consolidated
Statements of Cash Flows
Three Months Ended ($000, unaudited)
April 29, 2023
April 30, 2022
Cash Flows From Operating Activities Net
earnings
$
371,191
$
338,445
Adjustments to reconcile net earnings to net cash provided by (used
in) operating activities: Depreciation and
amortization
99,379
92,108
Stock-based compensation
33,063
36,071
Deferred income taxes
10,792
29,233
Change in assets and liabilities: Merchandise
inventory
(218,240)
(411,278)
Other current assets
(51,914)
(70,331)
Accounts payable
46,577
(189,888)
Other current liabilities
16,336
(325,075)
Income taxes
105,225
81,625
Operating lease assets and liabilities, net
(102)
2,902
Other long-term, net
845
(79)
Net cash provided by (used in) operating activities
413,152
(416,267)
Cash Flows From Investing Activities
Additions to property and equipment
(167,253)
(109,848)
Net cash used in investing activities
(167,253)
(109,848)
Cash Flows From Financing Activities
Issuance of common stock related to stock plans
6,149
5,917
Treasury stock purchased
(37,522)
(38,113)
Repurchase of common stock
(234,468)
(239,565)
Dividends paid
(114,794)
(108,908)
Net cash used in financing activities
(380,635)
(380,669)
Net decrease in cash, cash equivalents, and
restricted cash and cash equivalents
(134,736)
(906,784)
Cash, cash equivalents, and restricted cash
and cash equivalents: Beginning of period
4,612,241
4,982,382
End of period
$
4,477,505
$
4,075,598
Reconciliations: Cash and cash
equivalents
$
4,416,480
$
4,015,567
Restricted cash and cash equivalents included in prepaid expenses
and other
12,815
11,406
Restricted cash and cash equivalents included in other long-term
assets
48,210
48,625
Total cash, cash equivalents, and restricted cash and cash
equivalents:
$
4,477,505
$
4,075,598
Supplemental Cash Flow Disclosures
Interest paid
$
40,158
$
40,158
Income taxes paid
$
47
$
160
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230518005661/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
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