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SEC Filings

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



Stores. Our expansion strategy is to open additional stores based on market penetration, local demographic characteristics, competition, expected store profitability, and the ability to leverage overhead expenses. We continually evaluate opportunistic real estate acquisitions and opportunities for potential new store locations. We also evaluate our current store locations and determine store closures based on similar criteria.

 
Three Months Ended
 
 
Nine Months Ended
Store Count
November 3, 2018

 
October 28, 2017

 
 
November 3, 2018

 
October 28, 2017

Beginning of the period
1,680

 
1,589

 
 
1,622

 
1,533

Opened in the period
40

 
40

 
 
99

 
96

Closed in the period

 
(2
)
 
 
(1
)
 
(2
)
End of the period
1,720

 
1,627

 
 
1,720

 
1,627


Sales. Sales for the three month period ended November 3, 2018, increased $221 million, or 6.6%, compared to the three month period ended October 28, 2017, due to the opening of 93 net new stores between October 28, 2017 and November 3, 2018, and a 3% increase in “comparable” store sales (defined as stores that have been open for more than 14 complete months).

Sales for the nine month period ended November 3, 2018, increased $809 million, or 8.0%, compared to the nine month period ended October 28, 2017, due to the opening of 93 net new stores between October 28, 2017 and November 3, 2018, and a 3% increase in comparable store sales.

Our sales mix for the three and nine month periods ended November 3, 2018 and October 28, 2017 is shown below:

 
Three Months Ended
 
Nine Months Ended
 
November 3, 2018

 
October 28, 2017

 
November 3, 2018

 
October 28, 2017

Ladies
27
%
 
28
%
 
28
%
 
28
%
Home Accents and Bed and Bath
25
%
 
25
%
 
24
%
 
25
%
Men's
14
%
 
13
%
 
13
%
 
13
%
Shoes
13
%
 
13
%
 
14
%
 
14
%
Accessories, Lingerie, Fine Jewelry, and Fragrances
13
%
 
13
%
 
13
%
 
12
%
Children's
8
%
 
8
%
 
8
%
 
8
%
Total
100
%
 
100
%
 
100
%
 
100
%

We intend to address the competitive climate for off-price apparel and home goods by pursuing and refining our existing strategies and by continuing to strengthen our organization, diversify our merchandise mix, and more fully develop our systems to improve regional and local merchandise offerings. Although our strategies and store expansion program contributed to sales gains for the three and nine month periods ended November 3, 2018, we cannot be sure that they will result in a continuation of sales growth or in an increase in net earnings.

Cost of goods sold. Cost of goods sold for the three and nine month periods ended November 3, 2018, increased $178 million and $616 million compared to the same periods in the prior year, mainly due to increased sales from the opening of 93 net new stores and a 3% increase in comparable store sales for both periods.

Cost of goods sold as a percentage of sales for the three month period ended November 3, 2018, increased approximately 60 basis points from the same period in the prior year, primarily due to a 50 basis point increase in freight costs, and buying and distribution costs that were higher by 15 basis points each. These increases were partially offset by a 20 basis point improvement in merchandise margin.

Cost of goods sold as a percentage of sales for the nine month period ended November 3, 2018, increased approximately 40 basis points from the same period in the prior year, primarily due to a 35 basis point increase in freight costs, a 25 basis point

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