Ross Dress for Less     Print Page  Close Window

SEC Filings

10-Q
ROSS STORES INC filed this Form 10-Q on 12/12/2018
Entire Document
 


The tax benefits related to stock-based compensation expense for the three and nine month periods ended November 3, 2018 were $5.1 million and $15.0 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 28, 2017 were $7.9 million and $22.7 million, respectively.

Restricted stock awards. The Company grants shares of restricted stock to directors, officers, and key employees. The market value of shares of restricted stock at the date of grant is amortized to expense over the vesting period of generally three to five years.

During the three and nine month periods ended November 3, 2018 and October 28, 2017, shares purchased by the Company for tax withholding totaled 27,234 and 688,613, and 37,214 and 683,961, respectively, and are considered treasury shares which are available for reissuance.

Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of a profitability-based performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted.
 
As of November 3, 2018, shares related to unvested restricted stock and performance share awards totaled 4.8 million shares. A summary of restricted stock and performance share award activity for the nine month period ended November 3, 2018, is presented below:

(000, except per share data)
Number of
shares

 
Weighted
average
grant date
fair value

Unvested at February 3, 2018
5,483

 
$
51.19

Awarded
1,179

 
75.88

Released
(1,751
)
 
44.10

Forfeited
(69
)
 
59.25

Unvested at November 3, 2018
4,842

 
$
60.98


The unamortized compensation expense at November 3, 2018, was $137.2 million, which is expected to be recognized over a weighted-average remaining period of 2.0 years. The unamortized compensation expense at October 28, 2017, was $123.0 million, which was expected to be recognized over a weighted-average remaining period of 2.0 years.

Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.


Note D: Earnings Per Share

The Company computes and reports both basic earnings per share ("EPS") and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted average number of common shares and dilutive common stock equivalents outstanding during the period. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards, including unexercised stock options, and unvested shares of both performance and non-performance based awards of restricted stock.

For the three and nine month periods ended November 3, 2018, approximately 4,800 and 10,000 weighted average shares were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for the period presented.

11