2014

Ross Stores Reports Strong Fourth Quarter And Fiscal Year 2012 Results

PLEASANTON, Calif., March 21, 2013 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 14 weeks ended February 2, 2013 of $1.07, up from $.85 for the 13 weeks ended January 28, 2012.  Net earnings for the 14 weeks ended February 2, 2013 grew to $236.6 million, up 23% from $192.0 million for the 13 weeks ended January 28, 2012. Sales for the 14 weeks ended February 2, 2013 grew 15% to $2.761 billion. Comparable store sales for the 13 weeks ended January 26, 2013, rose 5% on top of a 7% increase in the fourth quarter of 2011.

For the 53 weeks ended February 2, 2013, earnings per share grew to $3.53, from $2.86 for the 52 weeks ended January 28, 2012.  Net earnings for the 53 weeks ended February 2, 2013 grew 20% to $786.8 million, compared to $657.2 million for the 52 weeks ended January 28, 2012.  Sales for the 53 weeks ended February 2, 2013, rose 13% to $9.721 billion. Same store sales for the 52 weeks ended January 26, 2013 grew 6% compared to a 5% gain in 2011. 

Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "We are pleased with the record sales and earnings we delivered in the fourth quarter and 2012 fiscal year, especially considering they were achieved on top of strong multi-year gains. Results for both periods benefited from our ongoing ability to deliver compelling bargains on a wide assortment of exciting name brand fashions for the family and the home to today's value-focused consumers."

Mr. Balmuth continued, "Earnings before interest and taxes for the 2012 fourth quarter grew to 13.7% of sales, up from 13.0% in the fourth quarter of 2011.  For fiscal 2012, operating margin rose to a record 13.1%, a gain of 75 basis points on top of an 85 basis point increase in 2011. Profit margins for both the quarter and the full year mainly benefited from higher merchandise gross margin, leverage on operating expenses from the strong gains in same store sales and the impact of the 53rd week."  

Strong operating cash flows during 2012 continued to provide the resources to make capital investments in new store growth and infrastructure, as well as fund the completion of the Company's prior stock repurchase program and ongoing dividends.  A total of 7.5 million shares of common stock were repurchased during fiscal 2012, for an aggregate purchase price of $450 million, completing the two-year $900 million repurchase program announced in early 2011. In January 2013, the Company's Board of Directors approved a new two-year $1.1 billion stock repurchase program as well as a 21% increase in the regular quarterly cash dividend to $.17 per share. 

Mr. Balmuth noted, "The growth of our stock repurchase and dividend programs has been driven by the significant amounts of cash our business generates after self-funding store expansion and other capital needs.  We have repurchased stock as planned every year since 1993, and this is the 19th consecutive increase since initiating our quarterly cash dividend in 1994. This consistent record reflects our unwavering commitment to enhancing stockholder value and returns."

Looking ahead, Mr. Balmuth said, "We plan to stay intently focused on our core off-price mission of consistently delivering great bargains to our customers.  This continues to be the key to maximizing our opportunities for growth in sales and profits over both the short and the long term."

Discontinuing Monthly Sales Reporting

Beginning with the second quarter of fiscal 2013, the Company will no longer report monthly sales. Quarterly comparable store sales results will be provided with regularly scheduled earnings releases and conference calls.

In commenting, Mr. Balmuth said, "Reporting sales quarterly aligns us with the majority of other retailers who have already adopted this practice, while also increasing the focus on longer-term performance." 

The Company will host a conference call on Thursday, March 21, 2013 at 11:00 a.m. Eastern time to provide additional details concerning the fourth quarter and fiscal year 2012 results and management's outlook and plans for fiscal 2013.  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 # 22346952 until 8:00 p.m. Eastern time on March 28, 2013, as well as at the Company's website address. 

Forward-Looking Statements:  This press release and the recorded comments on our corporate website contain 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 retailing merchandise 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 geo-economic 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 through the implementation of new processes and systems enhancements; managing our planned data center and headquarters moves without disruption or unanticipated costs; 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 2011, Form 10-Qs for fiscal 2012 and Form 8-Ks for fiscal 2012 and 2013.  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 Pleasanton, California, with fiscal 2012 revenues of $9.7 billion.  The Company operates Ross Dress for Less® ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,091 locations in 33 states, the District of Columbia and Guam at fiscal 2012 year end. 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 108 dd's DISCOUNTS® in eight states at the end of fiscal 2012 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


Senior Vice President,

Director, Investor Relations


Deputy Chief Financial Officer

(925) 965-4668


(925) 965-4503 

connie.wong@ros.com

 

 

Ross Stores, Inc.

Condensed Consolidated Statements of Earnings


















Three Months Ended 


Twelve Months Ended 






February 2,


January 28,


February 2,


January 28,

($000, except stores and per share data, unaudited)


2013


2012


2013


2012













Sales



$2,760,646


$2,397,878


$9,721,065


$8,608,291













Costs and Expenses











Costs of goods sold



1,993,661


1,745,034


7,011,428


6,240,760


Selling, general and administrative



390,003


341,794


1,437,886


1,304,065


Interest expense, net



946


2,693


6,907


10,322



Total  costs and expenses



2,384,610


2,089,521


8,456,221


7,555,147













Earnings before taxes



376,036


308,357


1,264,844


1,053,144

Provision for taxes on earnings



139,434


116,405


478,081


395,974

Net earnings



$   236,602


$   191,952


$   786,763


$   657,170













Earnings per share 1











Basic



$        1.09


$        0.86


$        3.59


$        2.91


Diluted



$        1.07


$        0.85


$        3.53


$        2.86

























Weighted average shares outstanding (000)1











Basic



216,936


222,288


219,130


225,915


Diluted



220,508


226,511


222,784


229,982

























Dividends 1











Cash dividends declared per share



$        0.31


$        0.25


$        0.59


$        0.47

























Stores open at end of period



1,199


1,125


1,199


1,125













 1All share and per share amounts have been adjusted for the two-for-one stock split effective December 15, 2011.

 

 

Ross Stores, Inc.

Condensed Consolidated Balance Sheets












February 2,


January 28,

($000, unaudited)


2013


2012

Assets












Current Assets






Cash and cash equivalents


$   646,761


$   649,835


Short-term investments


1,087


658


Accounts receivable


59,617


50,848


Merchandise inventory


1,209,237


1,130,070


Prepaid expenses and other


94,318


87,362


Deferred income taxes


20,407


5,598



Total current assets


2,031,427


1,924,371








Property and equipment, net


1,493,284


1,241,722

Long-term investments


4,374


5,602

Other long-term assets


141,476


129,514

Total assets


$3,670,561


$3,301,209








Liabilities and Stockholders' Equity












Current Liabilities






Accounts payable    


$   807,534


$   761,717


Accrued expenses and other


320,415


304,654


Accrued payroll and benefits


241,129


248,552


Income taxes payable


53,504


31,129



Total current liabilities


1,422,582


1,346,052








Long-term debt


150,000


150,000

Other long-term liabilities


246,815


203,625

Deferred income taxes


84,301


108,520








Commitments and contingencies












Stockholders' Equity


1,766,863


1,493,012

Total liabilities and stockholders' equity


$3,670,561


$3,301,209















 

 

Ross Stores, Inc.

Condensed Consolidated Statements of Cash Flows












Twelve  Months Ended





February 2,


January 28,

($000, unaudited)


2013


2012








Cash Flows From Operating Activities





Net earnings


$   786,763


$  657,170

Adjustments to reconcile net earnings to net cash





provided by operating activities:






Depreciation and amortization


185,491


159,892


Stock-based compensation


48,952


40,404


Deferred income taxes


(39,028)


21,722


Tax benefit from equity issuance


29,989


19,040


Excess tax benefit from stock-based compensation


(29,103)


(18,180)


Change in assets and liabilities:







Merchandise inventory


(79,167)


(43,153)



Other current assets


(14,474)


(10,329)



Accounts payable


40,109


(11,614)



Other current liabilities 


18,146


(2,109)



Other long-term, net


31,966


7,262



Net cash provided by operating activities


979,644


820,105








Cash Flows From Investing Activities





Additions to property and equipment


(424,434)


(416,271)

Increase in restricted cash and investments


(2,107)


(60,086)

Purchases of investments


(5,430)


-

Proceeds from investments


6,247


4,589



Net cash used in investing activities


(425,724)


(471,768)








Cash Flows From Financing Activities





Excess tax benefit from stock-based compensation


29,103


18,180

Issuance of common stock related to stock plans


19,043


17,290

Treasury stock purchased


(29,446)


(15,854)

Repurchase of common stock


(450,000)


(450,000)

Dividends paid


(125,694)


(102,042)



Net cash used in financing activities


(556,994)


(532,426)








Net decrease in cash and cash equivalents


(3,074)


(184,089)








Cash and cash equivalents:







Beginning of year


649,835


833,924



End of year


$   646,761


$  649,835








Supplemental Cash Flow Disclosures





Interest paid


$      9,668


$     9,668

Income taxes paid


$   435,808


$  370,074








Non-Cash Investing Activities





(Decrease) increase in fair value of investment securities


$          (76)


$        226















 

SOURCE Ross Stores, Inc.



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