Announces New Two-year Stock Repurchase
Authorization and Raises Quarterly Cash Dividend
Provides First Quarter and Fiscal 2024
Guidance
Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per
share for the 14 weeks ended February 3, 2024 of $1.82, up from
$1.31 per share for the 13 weeks ended January 28, 2023. Net income
for the period rose to $610 million versus $447 million last year.
Sales for the 14 weeks ended February 3, 2024 grew to $6.0 billion,
with comparable store sales for the 13 weeks ended January 27, 2024
up a robust 7% over the same period last year.
Fiscal 2023 earnings per share for the 53 weeks ended February
3, 2024 grew to $5.56, up from $4.38 in the 52-week fiscal 2022
year ended January 28, 2023. Net earnings for fiscal 2023 were $1.9
billion on sales of $20.4 billion, up from net earnings of $1.5
billion in fiscal 2022 on sales of $18.7 billion. Comparable store
sales for the 52 weeks ended January 27, 2024 grew a solid 5%.
The sales results for both the 2023 fourth quarter and fiscal
year included a $308 million benefit from the 53rd week. Earnings
per share for both periods also benefited from the extra week by
approximately $0.20 per share.
Barbara Rentler, Chief Executive Officer, commented, “We are
pleased with our fourth quarter sales and earnings results that
were well ahead of our expectations. Our above-plan sales were
driven by customers’ positive response to our improved assortments
of quality branded bargains throughout our stores.”
Ms. Rentler continued, “Fourth quarter operating margin grew 165
basis points to 12.4%, up from 10.7% in the prior year. This
improvement was mainly due to the strong gains in same store sales
and lower freight costs that were partially offset by higher
incentives. The 53rd week also benefited operating margin by 80
basis points."
Board Approves New Two-Year Stock
Repurchase Authorization and Increase in Quarterly
Dividend
During the recently completed fourth quarter, 1.9 million shares
were repurchased for a total price of $247 million. For fiscal
2023, a total of 8.2 million shares of common stock were
repurchased for an aggregate purchase price of $950 million,
completing the two-year stock repurchase program as planned.
The Company’s Board of Directors recently approved a new
two-year $2.1 billion stock repurchase authorization for fiscal
2024 and 2025. This new program represents an 11% increase over the
recently completed repurchase of $1.9 billion of common stock
during 2022 and 2023 combined. The Board also authorized a 10%
increase in the Company’s quarterly cash dividend to $0.3675 per
share. This higher quarterly dividend amount is payable on March
29, 2024 to stockholders of record as of March 15, 2024.
Ms. Rentler noted, “The increases to our stock repurchase and
dividend programs reflect our continued commitment to enhancing
stockholder value and returns given the strength of our balance
sheet and our ongoing ability to generate significant amounts of
cash after funding growth and other capital needs of the
business.”
Fiscal 2024 Guidance
Looking ahead, Ms. Rentler said, “While we are encouraged by the
sustained sales momentum that began in the second quarter of 2023
and continued through the holiday season, there remains ongoing
uncertainty in the macroeconomic and geopolitical environments. In
addition, while inflation has moderated, housing, food, and
gasoline costs remain elevated and continue to pressure our
low-to-moderate income customers’ discretionary spend. As a result,
while we hope to do better, we believe it is prudent to continue to
take a conservative approach to forecasting our business in
2024.”
For the 52 weeks ending February 1, 2025, the Company is
planning same store sales to grow 2% to 3% on top of a solid 5%
gain in 2023. Based on these assumptions, fiscal 2024 earnings per
share are projected to be $5.64 to $5.89 compared to $5.56 for the
fiscal year ended February 3, 2024. Again, last year’s results
included an estimated per share benefit of $0.20 from the 53rd
week.
For the 13 weeks ending May 4, 2024, comparable store sales are
forecast to be up 2% to 3% with earnings per share projected to be
$1.29 to $1.35, up from $1.09 in the first quarter ended April 29,
2023.
Ms. Rentler concluded, “As we move through the coming year, we
remain focused on delivering a wide assortment of quality branded
bargains for our customers. We believe this will be the most
important driver of our ability to gain market share over both the
short and long term.”
The Company will host a conference call on Tuesday, March 5,
2024 at 4:15 p.m. Eastern time to provide additional details
concerning its fourth quarter and fiscal year 2023 results, and
management’s outlook for fiscal 2024. 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 #13744604 until
8:00 p.m. Eastern time on March 12, 2024, as well as on the
Company’s website.
Forward-Looking Statements:
This press release and the related conference call remarks contain
forward-looking statements regarding, without limitation, projected
sales, costs, and earnings, planned new store growth, capital
expenditures, 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 and
operations, and they 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,” “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, uncertainties arising from the macroeconomic
environment, including inflation, high interest rates, housing
costs, energy and fuel costs, financial and credit market
conditions, recession concerns, geopolitical conditions (including
the current Russia-Ukraine and Middle East conflicts), public
health and public safety issues, that affect our costs, consumer
confidence, and consumer disposable income and shopping behavior;
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 or extreme temperatures 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 disrupt
our operations, and result in theft or unauthorized disclosure of
our confidential and valuable business information or 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; a public health or public safety crisis,
demonstrations, or a natural or man-made disaster in a region where
we have a concentration of stores, offices, or a distribution
center, that could harm our business; and 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 10-Qs and 8-Ks on file with the SEC. The
factors underlying our forecasts and plans 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.
About Ross Stores, Inc.
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100
(ROST) company headquartered in Dublin, California, with fiscal
2023 revenues of $20.4 billion. Currently, the Company operates
Ross Dress for Less® (“Ross”), the largest off-price apparel and
home fashion chain in the United States with 1,764 locations in 43
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 345 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 Twelve
Months Ended ($000, except stores and per share data,
unaudited)
February 3, 2024
January 28, 2023
February 3, 2024
January 28, 2023
Sales
$
6,022,501
$
5,214,231
$
20,376,941
$
18,695,829
Costs and Expenses Cost of goods sold
4,375,360
3,926,203
14,801,601
13,946,230
Selling, general and administrative
903,087
729,342
3,267,677
2,759,268
Interest (income) expense, net
(52,188
)
(22,719
)
(164,118
)
2,842
Total costs and expenses
5,226,259
4,632,826
17,905,160
16,708,340
Earnings before taxes
796,242
581,405
2,471,781
1,987,489
Provision for taxes on earnings
186,559
134,362
597,261
475,448
Net earnings
$
609,683
$
447,043
$
1,874,520
$
1,512,041
Earnings per share Basic
$
1.83
$
1.32
$
5.59
$
4.40
Diluted
$
1.82
$
1.31
$
5.56
$
4.38
Weighted-average shares outstanding (000)
Basic
332,399
339,752
335,187
343,452
Diluted
335,018
342,045
337,433
345,222
Store count at end of period
2,109
2,015
2,109
2,015
Ross Stores, Inc. Condensed Consolidated Balance
Sheets ($000, unaudited)
February 3, 2024
January 28, 2023
Assets Current Assets Cash and cash
equivalents
$
4,872,446
$
4,551,876
Accounts receivable
130,766
145,694
Merchandise inventory
2,192,220
2,023,495
Prepaid expenses and other
202,706
183,654
Total current assets
7,398,138
6,904,719
Property and equipment, net
3,531,901
3,181,527
Operating lease assets
3,126,841
3,098,134
Other long-term assets
243,229
232,083
Total assets
$
14,300,109
$
13,416,463
Liabilities and Stockholders’ Equity
Current Liabilities Accounts payable
$
1,955,850
$
2,009,924
Accrued expenses and other
671,867
638,561
Current operating lease liabilities
683,625
655,976
Accrued payroll and benefits
548,371
279,710
Income taxes payable
76,370
52,075
Current portion of long-term debt
249,713
—
Total current liabilities
4,185,796
3,636,246
Long-term debt
2,211,017
2,456,510
Non-current operating lease liabilities
2,603,349
2,593,961
Other long-term liabilities
232,383
224,104
Deferred income taxes
196,238
217,059
Commitments and contingencies
Stockholders’
Equity
4,871,326
4,288,583
Total liabilities and stockholders’ equity
$
14,300,109
$
13,416,463
Ross Stores, Inc. Condensed Consolidated
Statements of Cash Flows Twelve Months
Ended ($000, unaudited)
February 3, 2024
January 28, 2023
Cash Flows From Operating Activities Net earnings
$
1,874,520
$
1,512,041
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization
419,432
394,655
Stock-based compensation
145,490
121,936
Deferred income taxes
(20,821
)
79,417
Change in assets and liabilities: Merchandise inventory
(168,725
)
238,778
Other current assets
(2,261
)
(39,487
)
Accounts payable
(65,327
)
(365,262
)
Other current liabilities
296,980
(304,454
)
Income taxes
22,931
33,876
Operating lease assets and liabilities, net
8,330
9,261
Other long-term, net
3,941
8,612
Net cash provided by operating activities
2,514,490
1,689,373
Cash Flows From Investing Activities Additions to
property and equipment
(762,812
)
(654,070
)
Net cash used in investing activities
(762,812
)
(654,070
)
Cash Flows From Financing Activities Issuance of
common stock related to stock plans
24,900
24,702
Treasury stock purchased
(48,568
)
(48,855
)
Repurchase of common stock
(949,996
)
(949,996
)
Dividends paid
(454,814
)
(431,295
)
Net cash used in financing activities
(1,428,478
)
(1,405,444
)
Net increase (decrease) in cash, cash equivalents, and
restricted cash and cash equivalents
323,200
(370,141
)
Cash, cash equivalents, and restricted cash and cash
equivalents: Beginning of period
4,612,241
4,982,382
End of period
$
4,935,441
$
4,612,241
Reconciliations: Cash and cash equivalents
$
4,872,446
$
4,551,876
Restricted cash and cash equivalents included in prepaid expenses
and other
14,489
12,677
Restricted cash and cash equivalents included in other long-term
assets
48,506
47,688
Total cash, cash equivalents, and restricted cash and cash
equivalents:
$
4,935,441
$
4,612,241
Supplemental Cash Flow Disclosures Interest paid
$
80,316
$
80,316
Income taxes paid
$
595,152
$
362,156
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240305014900/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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