Ross Stores Reports First Quarter Earnings
Ross Stores (NASDAQ: ROST) reported a 17% increase in earnings per share to $1.34 for the 13 weeks ending May 1, 2021, with net income of $476 million, compared to $421 million in the same period of 2019. Sales reached $4.5 billion, driven by a 13% rise in comparable store sales. The company announced a $1.5 billion stock repurchase program, allocating $650 million for 2021. Looking ahead, ROST forecasts a 5% to 7% increase in same-store sales for the 13 weeks ending July 31, 2021, and expects EPS between $0.80 and $0.89, reflecting ongoing cost pressures.
- Earnings per share increased 17% to $1.34.
- Net income rose to $476 million, up from $421 million in 2019.
- Sales totaled $4.5 billion, with a 13% increase in comparable store sales.
- New stock repurchase program of $1.5 billion boosts shareholder value.
- Second quarter EPS projected to be lower than 2019 at $0.80 to $0.89, compared to $1.14.
- Forecasted same-store sales increase of only 5% to 7% for the July quarter, lower than previous growth.
Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per share for the 13 weeks ended May 1, 2021 grew
As previously announced, financial results and guidance throughout fiscal 2021 will be compared against fiscal 2019. We believe the significant impact from the extended closure of our operations in the spring of 2020, and the disruptions caused by COVID-19 throughout last year, make this a more relevant basis for comparison.
Barbara Rentler, Chief Executive Officer, commented, “First quarter sales significantly exceeded our expectations as we benefited considerably from a combination of government stimulus payments, ongoing vaccine rollouts, easing of COVID restrictions, and pent-up consumer demand. In addition, customers responded enthusiastically to the broad assortment of great bargains we offered throughout our stores. Operating margin of
Board Approves New
The Company’s Board of Directors authorized a new program to repurchase up to
Ms. Rentler noted, “The reinstatement of our share repurchase program reflects the current strength of our balance sheet, confidence in the Company’s ability to generate excess cash after funding our growth and other capital needs of the business, and our long-standing commitment to enhancing stockholder value and returns.”
Fiscal 2021 Guidance
Looking ahead, Ms. Rentler said, “Our results and the clear improvement in the macroeconomic environment make us optimistic about our prospects for the balance of the year. That said, it is difficult to precisely predict the lasting impact from the factors that benefited our first quarter sales results, especially the recent government stimulus payments. While we hope to do better, we are forecasting same store sales to be up
Ms. Rentler concluded, “Over the longer-term, we remain confident about our opportunity to gain market share as we expect to benefit significantly from a favorable competitive climate given the large number of retail store closures and bankruptcies in recent years. This, along with consumers’ heightened focus on value and convenience, bodes well for our ability to achieve solid results into the future.”
The Company will host a conference call on Thursday, May 20, 2021 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 2021. 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 #1273209 until 8:00 p.m. Eastern time on May 27, 2021, as well as on the Company’s website.
Forward-Looking Statements: This press release contains forward-looking statements regarding projected sales and earnings, planned new store growth, and other financial results and market conditions 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,” “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 COVID-19 pandemic; changes in the level of consumer spending on or preferences for apparel and home-related merchandise; impacts from the macro-economic environment, financial and credit markets, geopolitical conditions, unemployment levels or public health issues (such as pandemics) that affect consumer confidence and consumer disposable income; our need to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margins; competitive pressures in the apparel or home-related merchandise retailing industry; issues from selling and importing merchandise produced in other countries and from supply chain disruptions in other countries, including due to COVID-19 closures; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and that may result in temporary store closures and disruptions in deliveries of merchandise to our stores; 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; 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; potential disruptions in our supply chain or information systems; 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; damage to our corporate reputation or brands; our need to continually attract, train, and retain associates to execute our off-price 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 that could adversely affect our business; volatility in revenues and earnings; an additional pandemic, 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; and maintaining sufficient liquidity to support our continuing operations, new store openings and reopenings, and ongoing capital expenditure plans. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2020 and Form 8-Ks for fiscal 2021. 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 2020 revenues of
Ross Stores, Inc. |
||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||
Three Months Ended |
||||||||||||
| ( |
May 1, 2021 |
May 2, 2020 |
May 4, 2019 |
|||||||||
| Sales | $ |
4,516,080 |
$ |
1,842,673 |
|
$ |
3,796,642 |
|
||||
| Costs and Expenses | ||||||||||||
| Cost of goods sold |
|
3,198,396 |
|
1,889,991 |
|
|
2,701,668 |
|
||||
| Selling, general and administrative |
|
675,053 |
|
415,305 |
|
|
558,250 |
|
||||
| Interest expense (income), net |
|
19,049 |
|
6,666 |
|
|
(5,635 |
) |
||||
| Total costs and expenses |
|
3,892,498 |
|
2,311,962 |
|
|
3,254,283 |
|
||||
| Earnings (loss) before taxes |
|
623,582 |
|
(469,289 |
) |
|
542,359 |
|
||||
| Provision (benefit) for taxes on earnings (loss) |
|
147,103 |
|
(163,447 |
) |
|
121,217 |
|
||||
| Net earnings (loss) | $ |
476,479 |
$ |
(305,842 |
) |
$ |
421,142 |
|
||||
| Earnings (loss) per share | ||||||||||||
| Basic | $ |
1.35 |
$ |
(0.87 |
) |
$ |
1.16 |
|
||||
| Diluted | $ |
1.34 |
$ |
(0.87 |
) |
$ |
1.15 |
|
||||
| Weighted-average shares outstanding (000) | ||||||||||||
| Basic |
|
352,988 |
|
352,202 |
|
|
363,085 |
|
||||
| Diluted |
|
355,367 |
|
352,202 |
|
|
365,912 |
|
||||
| Store count at end of period |
|
1,866 |
|
1,832 |
|
|
1,745 |
|
||||
Ross Stores, Inc. |
|||||||||
Condensed Consolidated Balance Sheets |
|||||||||
| ( |
May 1, 2021 |
May 2, 2020 |
May 4, 2019 |
||||||
| Assets | |||||||||
| Current Assets | |||||||||
| Cash and cash equivalents | $ |
5,367,006 |
$ |
2,669,535 |
$ |
1,366,592 |
|||
| Accounts receivable |
|
167,139 |
|
49,624 |
|
121,607 |
|||
| Merchandise inventory |
|
1,697,992 |
|
1,757,263 |
|
1,813,773 |
|||
| Prepaid expenses and other |
|
199,391 |
|
111,493 |
|
160,733 |
|||
| Total current assets |
|
7,431,528 |
|
4,587,915 |
|
3,462,705 |
|||
| Property and equipment, net |
|
2,713,873 |
|
2,696,718 |
|
2,436,372 |
|||
| Operating lease assets |
|
3,004,747 |
|
3,078,373 |
|
2,942,980 |
|||
| Other long-term assets |
|
245,715 |
|
365,040 |
|
207,063 |
|||
| Total assets | $ |
13,395,863 |
$ |
10,728,046 |
$ |
9,049,120 |
|||
| Liabilities and Stockholders’ Equity | |||||||||
| Current Liabilities | |||||||||
| Accounts payable | $ |
2,574,780 |
$ |
706,267 |
$ |
1,296,183 |
|||
| Accrued expenses and other |
|
583,399 |
|
374,811 |
|
450,762 |
|||
| Current operating lease liabilities |
|
599,838 |
|
570,832 |
|
536,900 |
|||
| Accrued payroll and benefits |
|
323,165 |
|
166,707 |
|
220,376 |
|||
| Income taxes payable |
|
172,276 |
|
- |
|
89,290 |
|||
| Short-term debt |
|
- |
|
805,000 |
|
- |
|||
| Current portion of long-term debt |
|
64,937 |
|
- |
|
- |
|||
| Total current liabilities |
|
4,318,395 |
|
2,623,617 |
|
2,593,511 |
|||
| Long-term debt |
|
2,449,208 |
|
2,285,614 |
|
312,552 |
|||
| Non-current operating lease liabilities |
|
2,542,358 |
|
2,631,769 |
|
2,514,530 |
|||
| Other long-term liabilities |
|
285,762 |
|
206,504 |
|
226,788 |
|||
| Deferred income taxes |
|
147,319 |
|
163,150 |
|
134,213 |
|||
| Commitments and contingencies | |||||||||
| Stockholders’ Equity |
|
3,652,821 |
|
2,817,392 |
|
3,267,526 |
|||
| Total liabilities and stockholders’ equity | $ |
13,395,863 |
$ |
10,728,046 |
$ |
9,049,120 |
|||
Ross Stores, Inc. |
||||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||||
Three Months Ended |
||||||||||||
| ( |
May 1, 2021 |
May 2, 2020 |
May 4, 2019 |
|||||||||
| Cash Flows From Operating Activities | ||||||||||||
| Net earnings (loss) | $ |
476,479 |
|
$ |
(305,842 |
) |
$ |
421,142 |
|
|||
| Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization |
|
87,510 |
|
|
90,598 |
|
|
82,757 |
|
|||
| Stock-based compensation |
|
28,674 |
|
|
24,739 |
|
|
19,689 |
|
|||
| Deferred income taxes |
|
25,452 |
|
|
13,471 |
|
|
16,543 |
|
|||
| Change in assets and liabilities: | ||||||||||||
| Merchandise inventory |
|
(189,010 |
) |
|
75,076 |
|
|
(63,331 |
) |
|||
| Other current assets |
|
(77,246 |
) |
|
88,286 |
|
|
(41,777 |
) |
|||
| Accounts payable |
|
349,540 |
|
|
(600,918 |
) |
|
122,654 |
|
|||
| Other current liabilities |
|
(71,623 |
) |
|
(268,925 |
) |
|
(108,208 |
) |
|||
| Income taxes |
|
121,255 |
|
|
(175,142 |
) |
|
56,206 |
|
|||
| Operating lease assets and liabilities, net |
|
2,554 |
|
|
3,001 |
|
|
2,855 |
|
|||
| Other long-term, net |
|
(765 |
) |
|
(2,786 |
) |
|
457 |
|
|||
| Net cash provided by (used in) operating activities |
|
752,820 |
|
|
(1,058,442 |
) |
|
508,987 |
|
|||
| Cash Flows From Investing Activities | ||||||||||||
| Additions to property and equipment |
|
(136,937 |
) |
|
(139,729 |
) |
|
(95,629 |
) |
|||
| Proceeds from investments |
|
- |
|
|
- |
|
|
517 |
|
|||
| Net cash used in investing activities |
|
(136,937 |
) |
|
(139,729 |
) |
|
(95,112 |
) |
|||
| Cash Flows From Financing Activities | ||||||||||||
| Net proceeds from issuance of short-term debt |
|
- |
|
|
805,601 |
|
|
- |
|
|||
| Payments of short-term debt |
|
- |
|
|
(615 |
) |
|
- |
|
|||
| Net proceeds from issuance of long-term debt |
|
- |
|
|
1,976,030 |
|
|
- |
|
|||
| Payments of debt issuance costs |
|
- |
|
|
(3,135 |
) |
|
- |
|
|||
| Issuance of common stock related to stock plans |
|
6,063 |
|
|
5,444 |
|
|
5,295 |
|
|||
| Treasury stock purchased |
|
(47,378 |
) |
|
(32,317 |
) |
|
(50,880 |
) |
|||
| Repurchase of common stock |
|
- |
|
|
(132,467 |
) |
|
(320,130 |
) |
|||
| Dividends paid |
|
(101,519 |
) |
|
(101,414 |
) |
|
(93,722 |
) |
|||
| Net cash (used in) provided by financing activities |
|
(142,834 |
) |
|
2,517,127 |
|
|
(459,437 |
) |
|||
| Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents |
|
473,049 |
|
|
1,318,956 |
|
|
(45,562 |
) |
|||
| Cash, cash equivalents, and restricted cash and cash equivalents: | ||||||||||||
| Beginning of period |
|
4,953,769 |
|
|
1,411,410 |
|
|
1,478,079 |
|
|||
| End of period | $ |
5,426,818 |
|
$ |
2,730,366 |
|
$ |
1,432,517 |
|
|||
| Reconciliations: | ||||||||||||
| Cash and cash equivalents | $ |
5,367,006 |
|
$ |
2,669,535 |
|
$ |
1,366,592 |
|
|||
| Restricted cash and cash equivalents included in prepaid expenses and other |
|
10,766 |
|
|
10,341 |
|
|
11,867 |
|
|||
| Restricted cash and cash equivalents included in other long-term assets |
|
49,046 |
|
|
50,490 |
|
|
54,058 |
|
|||
| Total cash, cash equivalents, and restricted cash and cash equivalents: | $ |
5,426,818 |
|
$ |
2,730,366 |
|
$ |
1,432,517 |
|
|||
| Supplemental Cash Flow Disclosures | ||||||||||||
| Interest paid | $ |
39,929 |
|
$ |
4,235 |
|
$ |
4,219 |
|
|||
| Income taxes paid (refunded) | $ |
396 |
|
$ |
(1,777 |
) |
$ |
48,468 |
|
|||
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FAQ
What were Ross Stores' Q1 2021 earnings results?
How did comparable store sales perform for Ross Stores?
What guidance did Ross Stores provide for the second quarter of 2021?
What is the new stock repurchase program for Ross Stores?
What challenges does Ross Stores foresee in the upcoming quarters?
