ROST
$54.16
Ross Stores
$1.09
2.05%
Earnings Details
1st Quarter April 2017
Thursday, May 18, 2017 4:01:01 PM
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Summary

Ross Stores Reports In-line

Ross Stores (ROST) reported 1st Quarter April 2017 earnings of $0.82 per share on revenue of $3.3 billion. The consensus earnings estimate was $0.79 per share on revenue of $3.3 billion. The Earnings Whisper number was $0.82 per share. Revenue grew 7.0% on a year-over-year basis.

The company said it expects second quarter earnings of $0.73 to $0.76 per share. The current consensus earnings estimate is $0.77 per share for the quarter ending July 31, 2017. The company also said it expects fiscal year earnings of $3.07 to $3.17 per share. The company's previous guidance was earnings of $3.02 to $3.15 per share and the current consensus earnings estimate is $3.12 per share for the year ending January 31, 2018.

Ross Stores Inc is the off-price apparel and home fashion chain in the United States. It It operate two brands of off-price retail apparel and home fashion stores namely Ross Dress for Less(r ) and dds DISCOUNTS(r).

Results
Reported Earnings
$0.82
Earnings Whisper
$0.82
Consensus Estimate
$0.79
Reported Revenue
$3.31 Bil
Revenue Estimate
$3.28 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Ross Stores Reports First Quarter Earnings

Ross Stores, Inc. (ROST) today reported earnings per share for the 13 weeks ended April 29, 2017 of $.82 up from $.73 in the same period last year. Net earnings for the 2017 first quarter grew to $321 million, compared to $291 million in the prior year. Sales for the current year quarter increased 7% to $3.3 billion, with comparable store sales up 3%.

Barbara Rentler, Chief Executive Officer, commented, "We achieved respectable growth in both sales and earnings during the first quarter despite the uncertainty and volatility in the external environment. Operating margin of 15.2% exceeded our expectations due to above-plan sales and merchandise margin."

Ms. Rentler continued, "During the first quarter of fiscal 2017, we repurchased 3.3 million shares of common stock for an aggregate price of $215 million. We remain on track to buy back a total of $875 million in common stock during fiscal 2017 under the new two-year $1.75 billion authorization approved by our Board of Directors in February of this year."

Looking ahead, Ms. Rentler commented, "For the second quarter ending July 29, 2017, we are forecasting same store sales to be up 1% to 2%, on top of a 4% gain last year, with earnings per share of $.73 to $.76, up from $.71 in the prior year period. Based on our first quarter results and guidance for the second quarter, we now project earnings per share for the 53 weeks ending February 3, 2018 to be in the range of $3.07 to $3.17, compared to $2.83 last year."

The Company will host a conference call on Thursday, May 18, 2017 at 4:15 p.m. Eastern time to provide additional details concerning its first quarter results and management’s outlook for the second quarter of fiscal 2017. 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 #14705120 until 8:00 p.m. Eastern time on May 25, 2017, 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(R) ("Ross") and dd’s DISCOUNTS(R) 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 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; potential disruptions in our supply chain or information systems; issues involving the quality, safety, or authenticity of products we sell could harm our reputation, result in lost sales, and/or increase our costs; our ability to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margin; changes in U.S. tax or tariff policy regarding apparel and other home-related merchandise produced in other countries that could adversely affect our business; volatility in revenues and earnings; an adverse outcome in various legal, regulatory, or tax matters; a natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center; unexpected issues or costs from expanding in existing markets and entering new geographic markets; obtaining acceptable new store sites with favorable consumer demographics; damage to our corporate reputation or brands; effectively advertising and marketing our brands; issues from selling and importing merchandise produced in 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 2016, and Form 8-Ks for fiscal 2017. 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 2016 revenues of $12.9 billion. The Company operates Ross Dress for Less(R) ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,363 locations in 37 states, the District of Columbia and Guam as of April 29, 2017. 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 198 dd’s DISCOUNTS(R) in 15 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, 2017
April 30, 2016
Sales
$
3,306,429
$
3,088,995
Costs and Expenses
Cost of goods sold
2,329,966
2,176,205
Selling, general and administrative
474,819
436,924
Interest expense, net
3,169
4,364
Total costs and expenses
2,807,954
2,617,493
Earnings before taxes
498,475
471,502
Provision for taxes on earnings
177,457
180,868
Net earnings
$
321,018
$
290,634
Earnings per share
Basic
$
0.83
$
0.73
Diluted
$
0.82
$
0.73
Weighted average shares outstanding (000)
Basic
386,433
395,799
Diluted
389,730
398,812
Dividends
Cash dividends declared per share
$
0.1600
$
0.1350
Stores open at end of period
1,561
1,473
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000, unaudited)
April 29, 2017
April 30, 2016
Assets
Current Assets
Cash and cash equivalents
$
1,244,219
$
910,025
Short-term investments
-
1,727
Accounts receivable
100,840
96,244
Merchandise inventory
1,594,760
1,498,449
Prepaid expenses and other
124,916
122,678
Total current assets
3,064,735
2,629,123
Property and equipment, net
2,308,689
2,318,456
Long-term investments
1,267
1,333
Other long-term assets
178,284
165,265
Total assets
$
5,552,975
$
5,114,177
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable
$
1,178,029
$
1,056,257
Accrued expenses and other
418,846
382,107
Accrued payroll and benefits
209,138
201,830
Income taxes payable
131,710
110,702
Total current liabilities
1,937,723
1,750,896
Long-term debt
396,611
396,142
Other long-term liabilities
309,339
286,897
Deferred income taxes
131,556
140,801
Commitments and contingencies
Stockholders’ Equity
2,777,746
2,539,441
Total liabilities and stockholders’ equity
$
5,552,975
$
5,114,177
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended
($000, unaudited)
April 29, 2017
April 30, 2016
Cash Flows From Operating Activities
Net earnings
$
321,018
$
290,634
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization
75,820
73,878
Stock-based compensation
20,238
17,716
Deferred income taxes
10,847
10,713
Change in assets and liabilities:
Merchandise inventory
(81,874 )
(79,345 )
Other current assets
(37,168 )
(29,150 )
Accounts payable
162,788
123,886
Other current liabilities
41,900
54,415
Other long-term, net
7,269
6,333
Net cash provided by operating activities
520,838
469,080
Cash Flows From Investing Activities
Additions to property and equipment
(75,971 )
(79,724 )
Increase in restricted cash and investments
(60 )
(44 )
Net cash used in investing activities
(76,031 )
(79,768 )
Cash Flows From Financing Activities
Excess tax benefit from stock-based compensation
-
20,538
Issuance of common stock related to stock plans
4,404
5,500
Treasury stock purchased
(38,754 )
(36,933 )
Repurchase of common stock
(215,042 )
(175,758 )
Dividends paid
(62,795 )
(54,236 )
Net cash used in financing activities
(312,187 )
(240,889 )
Net increase in cash and cash equivalents
132,620
148,423
Cash and cash equivalents:
Beginning of period
1,111,599
761,602
End of period
$ 1,244,219
$
910,025
Supplemental Cash Flow Disclosures
Interest paid
$
4,219
$
4,219
Income taxes paid
$
46,519
$
26,763

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SOURCE: Ross Stores, Inc.

Ross Stores, Inc.
Michael Hartshorn, 925-965-4503
Group Senior Vice President, Chief Financial Officer
or
Connie Kao, 925-965-4668
Vice President, Investor Relations
connie.kao@ros.com