Ross Stores Reports Second Quarter Earnings
- Ross Stores reports strong second quarter results with sales of $4.9 billion, up 6.5% compared to the previous year. Earnings per share were $1.32, an increase of 18.9%. Comparable store sales were up 5%, indicating strong customer response to improved value offerings. The company plans to buy back $950 million of common stock this year, which could positively impact stock price.
- None.
Provides Second Half and Updated Fiscal 2023 Guidance
For the six months ended July 29, 2023, earnings per share were
Barbara Rentler, Chief Executive Officer, commented, “We are pleased with our second quarter results, with both sales and earnings well above our expectations. Along with easing inflationary pressures, customers responded well to our improved value offerings throughout our stores. Second quarter operating margin was flat to last year at
She continued, “During the second quarter, we repurchased 2.2 million shares of common stock for an aggregate price of
Second Half and Updated Fiscal 2023 Guidance
Looking ahead, Ms. Rentler commented, “Despite the recent moderation in inflation, our low-to-moderate income customer continues to face persistently higher costs on necessities. As such, we believe it is prudent to continue to plan the business cautiously. However, given our improved second quarter performance, we are raising our second half sales and earnings outlook. We are now planning comparable store sales for the third and fourth quarters of 2023 to be up
She continued, “If the second half performs in line with these updated sales assumptions, earnings per share for the third quarter are projected to be
Ms. Rentler concluded, “Moving forward, we remain focused on delivering the most compelling bargains possible while also carefully managing our expenses and inventory to maximize our potential for both sales and earnings growth. Longer-term, we believe the rigorous execution of our off-price business model will allow us to consistently deliver solid results.”
The Company will host a conference call on Thursday, August 17, 2023 at 4:15 p.m. Eastern time to provide additional details concerning its second quarter results and management’s outlook for the second half 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 #13740437 until 8:00 p.m. Eastern time on August 24, 2023, 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, 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 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, interest rates, housing costs, energy and fuel costs, financial and credit market conditions, recession concerns, geopolitical conditions (including the current
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in
Ross Stores, Inc. | |||||||||||||||||
Condensed Consolidated Statements of Earnings | |||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||
( |
July 29, 2023 |
|
July 30, 2022 |
|
July 29, 2023 |
|
July 30, 2022 |
||||||||||
Sales | $ |
4,934,905 |
|
$ |
4,583,009 |
$ |
9,429,591 |
|
$ |
8,916,109 |
|||||||
Costs and Expenses | |||||||||||||||||
Cost of goods sold |
|
3,569,367 |
|
|
3,399,535 |
|
6,861,973 |
|
|
6,595,981 |
|||||||
Selling, general and administrative |
|
807,898 |
|
|
667,063 |
|
1,554,120 |
|
|
1,336,559 |
|||||||
Interest (income) expense, net |
|
(37,214 |
) |
|
10,667 |
|
(68,611 |
) |
|
28,363 |
|||||||
Total costs and expenses |
|
4,340,051 |
|
|
4,077,265 |
|
8,347,482 |
|
|
7,960,903 |
|||||||
Earnings before taxes |
|
594,854 |
|
|
505,744 |
|
1,082,109 |
|
|
955,206 |
|||||||
Provision for taxes on earnings |
|
148,535 |
|
|
121,227 |
|
264,599 |
|
|
232,244 |
|||||||
Net earnings | $ |
446,319 |
|
$ |
384,517 |
$ |
817,510 |
|
$ |
722,962 |
|||||||
Earnings per share | |||||||||||||||||
Basic | $ |
1.33 |
|
$ |
1.11 |
$ |
2.42 |
|
$ |
2.09 |
|||||||
Diluted | $ |
1.32 |
|
$ |
1.11 |
$ |
2.41 |
|
$ |
2.08 |
|||||||
Weighted-average shares outstanding (000) | |||||||||||||||||
Basic |
|
336,231 |
|
|
344,884 |
|
337,140 |
|
|
345,969 |
|||||||
Diluted |
|
337,932 |
|
|
346,106 |
|
339,003 |
|
|
347,470 |
|||||||
Store count at end of period |
|
2,061 |
|
|
1,980 |
|
2,061 |
|
|
1,980 |
|||||||
Ross Stores, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
( |
July 29, 2023 |
July 30, 2022 |
||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ |
4,583,606 |
$ |
3,903,670 |
||||
Accounts receivable |
|
175,410 |
|
167,503 |
||||
Merchandise inventory |
|
2,300,063 |
|
2,716,878 |
||||
Prepaid expenses and other |
|
214,673 |
|
197,020 |
||||
Total current assets |
|
7,273,752 |
|
6,985,071 |
||||
Property and equipment, net |
|
3,310,605 |
|
2,929,774 |
||||
Operating lease assets |
|
3,164,685 |
|
3,025,814 |
||||
Other long-term assets |
|
238,260 |
|
239,263 |
||||
Total assets | $ |
13,987,302 |
$ |
13,179,922 |
||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ |
2,150,999 |
$ |
2,085,680 |
||||
Accrued expenses and other |
|
689,866 |
|
611,186 |
||||
Current operating lease liabilities |
|
668,028 |
|
647,504 |
||||
Accrued payroll and benefits |
|
435,300 |
|
300,611 |
||||
Income taxes payable |
|
25,449 |
|
— |
||||
Total current liabilities |
|
3,969,642 |
|
3,644,981 |
||||
Long-term debt |
|
2,458,615 |
|
2,454,413 |
||||
Non-current operating lease liabilities |
|
2,653,632 |
|
2,525,512 |
||||
Other long-term liabilities |
|
231,945 |
|
231,285 |
||||
Deferred income taxes |
|
218,726 |
|
196,780 |
||||
Commitments and contingencies | ||||||||
Stockholders’ Equity |
|
4,454,742 |
|
4,126,951 |
||||
Total liabilities and stockholders’ equity | $ |
13,987,302 |
$ |
13,179,922 |
||||
Ross Stores, Inc. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Six Months Ended | ||||||||||
( |
July 29, 2023 |
July 30, 2022 |
||||||||
Cash Flows From Operating Activities | ||||||||||
Net earnings | $ |
817,510 |
|
$ |
722,962 |
|
||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||||
Depreciation and amortization |
|
197,924 |
|
|
189,181 |
|
||||
Stock-based compensation |
|
72,492 |
|
|
62,874 |
|
||||
Deferred income taxes |
|
1,667 |
|
|
59,138 |
|
||||
Change in assets and liabilities: | ||||||||||
Merchandise inventory |
|
(276,568 |
) |
|
(454,605 |
) |
||||
Other current assets |
|
(60,431 |
) |
|
(71,290 |
) |
||||
Accounts payable |
|
144,775 |
|
|
(288,454 |
) |
||||
Other current liabilities |
|
235,490 |
|
|
(265,399 |
) |
||||
Income taxes |
|
(24,152 |
) |
|
(13,941 |
) |
||||
Operating lease assets and liabilities, net |
|
5,172 |
|
|
4,660 |
|
||||
Other long-term, net |
|
2,402 |
|
|
(1,391 |
) |
||||
Net cash provided by (used in) operating activities |
|
1,116,281 |
|
|
(56,265 |
) |
||||
Cash Flows From Investing Activities | ||||||||||
Additions to property and equipment |
|
(363,459 |
) |
|
(243,346 |
) |
||||
Net cash used in investing activities |
|
(363,459 |
) |
|
(243,346 |
) |
||||
Cash Flows From Financing Activities | ||||||||||
Issuance of common stock related to stock plans |
|
12,358 |
|
|
11,892 |
|
||||
Treasury stock purchased |
|
(38,435 |
) |
|
(38,634 |
) |
||||
Repurchase of common stock |
|
(464,890 |
) |
|
(475,000 |
) |
||||
Dividends paid |
|
(228,799 |
) |
|
(217,193 |
) |
||||
Net cash used in financing activities |
|
(719,766 |
) |
|
(718,935 |
) |
||||
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents |
|
33,056 |
|
|
(1,018,546 |
) |
||||
Cash, cash equivalents, and restricted cash and cash equivalents: | ||||||||||
Beginning of period |
|
4,612,241 |
|
|
4,982,382 |
|
||||
End of period | $ |
4,645,297 |
|
$ |
3,963,836 |
|
||||
Reconciliations: | ||||||||||
Cash and cash equivalents | $ |
4,583,606 |
|
$ |
3,903,670 |
|
||||
Restricted cash and cash equivalents included in prepaid expenses and other |
|
12,955 |
|
|
11,432 |
|
||||
Restricted cash and cash equivalents included in other long-term assets |
|
48,736 |
|
|
48,734 |
|
||||
Total cash, cash equivalents, and restricted cash and cash equivalents: | $ |
4,645,297 |
|
$ |
3,963,836 |
|
||||
Supplemental Cash Flow Disclosures | ||||||||||
Interest paid | $ |
40,158 |
|
$ |
40,158 |
|
||||
Income taxes paid | $ |
287,084 |
|
$ |
187,047 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230817468485/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
Source: Ross Stores, Inc.
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