 AllRoss Stores Reports Fourth Quarter and Fiscal 2016 Results |
Announces New Two-Year $1.75 Billion Stock Repurchase Program
and 19% Increase in Quarterly Cash Dividend
Also Provides First Quarter and Fiscal 2017 Guidance
DUBLIN, Calif.--(BUSINESS WIRE)--Feb. 28, 2017--
Ross Stores, Inc. (Nasdaq:ROST) today reported earnings per share for
the fourth quarter ended January 28, 2017 of $.77, up 17% from the prior
year, on net earnings that rose 14% to $301 million. Sales for the
fiscal 2016 fourth quarter grew 8% to $3.5 billion, with comparable
store sales up 4% versus a 4% gain last year.
For the fiscal year, earnings per share rose 13% to $2.83, while net
earnings increased 10% to $1.1 billion. Sales for the 2016 fiscal year
grew 8% to $12.9 billion, with comparable store sales up 4% on top of a
4% increase in 2015.
Barbara Rentler, Chief Executive Officer, commented, “We are very
pleased with our better-than-expected sales and earnings results for the
fourth quarter and fiscal year, especially given our strong multi-year
comparisons and the highly competitive and promotional holiday season.
Our results continued to benefit from our ability to offer customers
great values on a wide assortment of gifts and fashions for the family
and the home.”
Ms. Rentler continued, “Fourth quarter operating margin grew 90 basis
points to 13.6% up from 12.7% in the prior year. This improvement was
mainly driven by our above-plan sales along with a favorable comparison
of packaway-related costs versus last year’s fourth quarter. For the
2016 fiscal year, operating margin increased 40 basis points to a new
record of 14.0%.”
New Two-Year $1.75 Billion Stock Repurchase
Program and 19% Increase in Quarterly Cash Dividend
The Company’s Board of Directors authorized a new program to repurchase
$1.75 billion of its common stock over the next two fiscal years. At
recent stock prices, this new repurchase program represents about 6% of
the Company’s total market value and a 25% increase over the prior
two-year $1.4 billion authorization that was completed in January 2017.
The Board also approved an increase in the quarterly cash dividend to
$.16 per share, up 19% on top of a 15% increase in the prior year. This
higher quarterly dividend is payable on March 31, 2017 to stockholders
of record as of March 10, 2017.
In commenting on these actions, Ms. Rentler said, “Our larger two-year
$1.75 billion stock repurchase authorization and increase in the
quarterly cash dividend demonstrate our ongoing confidence in the
Company’s ability to generate significant amounts of cash after funding
our growth and the other capital needs of our business. We have
repurchased stock as planned every year since 1993 and also raised our
cash dividend annually since 1994. This consistent record also reflects
our unwavering commitment to enhancing stockholder value and returns.”
A total of 11.6 million shares of common stock were repurchased during
fiscal 2016, for an aggregate purchase price of $700 million. During the
fourth quarter, the Company repurchased 2.6 million shares for a total
price of $170 million.
Fiscal 2017 Guidance
Looking ahead, Ms. Rentler said, “There continues to be uncertainty in
the political, macro-economic, and retail climates, and we also face our
own challenging sales and earnings comparisons. Thus, while we hope to
do better, we believe it is prudent to remain somewhat cautious in
planning our business for the 2017 fiscal year.”
For the 52 weeks ending January 27, 2018, the Company is forecasting
same store sales to grow 1% to 2% compared to 4% last year. For the 53
weeks ending February 3, 2018, earnings per share are projected to be
$3.02 to $3.15, up 7% to 11% from $2.83 in fiscal 2016. Incorporated in
this guidance range is an estimated benefit to earnings per share of
approximately $.08 from the 53rd week in fiscal 2017.
For the first quarter ending April 29, 2017, comparable store sales are
forecast to be up 1% to 2% with earnings per share projected to be $.76
to $.79, up from $.73 in the first quarter of 2016.
The Company will host a conference call on Tuesday, February 28, 2017 at
4:15 p.m. Eastern time to provide additional details concerning its
fourth quarter and fiscal year 2016 results, and management’s outlook
and guidance for 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 #55318917 until
8:00 p.m. Eastern time on March 7, 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® (“Ross”) and dd’s DISCOUNTS®
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 - such
breaches of our data security, or our failure or delay in detecting and
mitigating a loss of personal or business information, could result in
damage to our reputation, loss of customer confidence, violation (or
alleged violation) of applicable laws, and could expose us to civil
claims, litigation and regulatory action, and to unanticipated costs and
disruption of our operations; 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 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; natural or
man-made disaster in California or in another region where we have a
concentration of stores, offices, or a distribution center; increase in
our labor costs; unexpected issues or costs from expanding in existing
markets and entering new geographic markets; obtaining acceptable new
store sites with favorable 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 2015, and Form 10-Qs and 8-Ks for fiscal 2016. 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®
(“Ross”), the largest off-price apparel and home fashion chain in the
United States with 1,340 locations in 36 states, the District of
Columbia and Guam at fiscal 2016 year end. 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 193 dd’s DISCOUNTS® in 15 states at the end of
fiscal 2016 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
|
|
Twelve Months Ended
|
($000, except stores and per share data, unaudited)
|
|
January 28, 2017
|
|
January 30, 2016
|
|
January 28, 2017
|
|
January 30, 2016
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
3,510,158
|
|
$
|
3,250,726
|
|
$
|
12,866,757
|
|
$
|
11,939,999
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
2,539,563
|
|
|
2,386,591
|
|
|
9,173,705
|
|
|
8,576,873
|
Selling, general and administrative
|
|
|
493,802
|
|
|
450,877
|
|
|
1,890,408
|
|
|
1,738,755
|
Interest expense, net
|
|
|
3,755
|
|
|
4,530
|
|
|
16,488
|
|
|
12,612
|
Total costs and expenses
|
|
|
3,037,120
|
|
|
2,841,998
|
|
|
11,080,601
|
|
|
10,328,240
|
|
|
|
|
|
|
|
|
|
Earnings before taxes
|
|
|
473,038
|
|
|
408,728
|
|
|
1,786,156
|
|
|
1,611,759
|
Provision for taxes on earnings
|
|
|
172,470
|
|
|
144,567
|
|
|
668,502
|
|
|
591,098
|
Net earnings
|
|
$
|
300,568
|
|
$
|
264,161
|
|
$
|
1,117,654
|
|
$
|
1,020,661
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.77
|
|
$
|
0.66
|
|
$
|
2.85
|
|
$
|
2.53
|
Diluted
|
|
$
|
0.77
|
|
$
|
0.66
|
|
$
|
2.83
|
|
$
|
2.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (000)
|
|
|
|
|
|
|
|
|
Basic
|
|
|
388,258
|
|
|
398,229
|
|
|
392,124
|
|
|
403,034
|
Diluted
|
|
|
391,139
|
|
|
401,619
|
|
|
394,958
|
|
|
406,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
|
|
|
Cash dividends declared per share
|
|
$
|
0.1350
|
|
$
|
0.1175
|
|
$
|
0.5400
|
|
$
|
0.4700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stores open at end of period
|
|
|
1,533
|
|
|
1,446
|
|
|
1,533
|
|
|
1,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ross Stores, Inc. Condensed Consolidated Balance
Sheets
|
|
|
|
|
|
($000, unaudited)
|
|
January 28, 2017
|
|
January 30, 2016
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,111,599
|
|
$
|
761,602
|
Short-term investments
|
|
|
-
|
|
|
1,737
|
Accounts receivable
|
|
|
75,154
|
|
|
73,627
|
Merchandise inventory
|
|
|
1,512,886
|
|
|
1,419,104
|
Prepaid expenses and other
|
|
|
113,410
|
|
|
116,125
|
Total current assets
|
|
|
2,813,049
|
|
|
2,372,195
|
|
|
|
|
|
Property and equipment, net
|
|
|
2,328,048
|
|
|
2,342,906
|
Long-term investments
|
|
|
1,288
|
|
|
1,331
|
Other long-term assets
|
|
|
166,966
|
|
|
152,687
|
Total assets
|
|
$
|
5,309,351
|
|
$
|
4,869,119
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
1,021,735
|
|
$
|
945,559
|
Accrued expenses and other
|
|
|
398,126
|
|
|
376,522
|
Accrued payroll and benefits
|
|
|
316,492
|
|
|
280,766
|
Income taxes payable
|
|
|
16,153
|
|
|
-
|
Total current liabilities
|
|
|
1,752,506
|
|
|
1,602,847
|
|
|
|
|
|
Long-term debt
|
|
|
396,493
|
|
|
396,025
|
Other long-term liabilities
|
|
|
290,950
|
|
|
268,168
|
Deferred income taxes
|
|
|
121,385
|
|
|
130,088
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
2,748,017
|
|
|
2,471,991
|
Total liabilities and stockholders’ equity
|
|
$
|
5,309,351
|
|
$
|
4,869,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ross Stores, Inc. Condensed Consolidated Statements
of Cash Flows
|
|
|
|
|
|
|
|
Twelve Months Ended
|
($000, unaudited)
|
|
January 28, 2017
|
|
January 30, 2016
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
Net earnings
|
|
$
|
1,117,654
|
|
|
$
|
1,020,661
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
302,515
|
|
|
|
274,828
|
|
Stock-based compensation
|
|
|
74,554
|
|
|
|
70,937
|
|
Deferred income taxes
|
|
|
(8,703
|
)
|
|
|
56,358
|
|
Tax benefit from equity issuance
|
|
|
23,331
|
|
|
|
42,382
|
|
Excess tax benefit from stock-based compensation
|
|
|
(23,331
|
)
|
|
|
(42,302
|
)
|
Change in assets and liabilities:
|
|
|
|
|
Merchandise inventory
|
|
|
(93,782
|
)
|
|
|
(46,429
|
)
|
Other current assets
|
|
|
(928
|
)
|
|
|
(13,496
|
)
|
Accounts payable
|
|
|
83,085
|
|
|
|
(41,464
|
)
|
Other current liabilities
|
|
|
76,676
|
|
|
|
7,796
|
|
Other long-term, net
|
|
|
7,780
|
|
|
|
(3,019
|
)
|
Net cash provided by operating activities
|
|
|
1,558,851
|
|
|
|
1,326,252
|
|
|
|
|
|
|
Cash Flows From Investing Activities
|
|
|
|
|
Additions to property and equipment
|
|
|
(297,880
|
)
|
|
|
(366,960
|
)
|
Decrease in restricted cash and investments
|
|
|
3,388
|
|
|
|
4,065
|
|
Purchases of investments
|
|
|
-
|
|
|
|
(718
|
)
|
Proceeds from investments
|
|
|
1,729
|
|
|
|
1,104
|
|
Net cash used in investing activities
|
|
|
(292,763
|
)
|
|
|
(362,509
|
)
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
Excess tax benefit from stock-based compensation
|
|
|
23,331
|
|
|
|
42,302
|
|
Issuance of common stock related to stock plans
|
|
|
18,539
|
|
|
|
20,186
|
|
Treasury stock purchased
|
|
|
(43,321
|
)
|
|
|
(68,925
|
)
|
Repurchase of common stock
|
|
|
(700,000
|
)
|
|
|
(700,000
|
)
|
Dividends paid
|
|
|
(214,640
|
)
|
|
|
(192,312
|
)
|
Net cash used in financing activities
|
|
|
(916,091
|
)
|
|
|
(898,749
|
)
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
349,997
|
|
|
|
64,994
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
Beginning of period
|
|
|
761,602
|
|
|
|
696,608
|
|
End of period
|
|
$
|
1,111,599
|
|
|
$
|
761,602
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures
|
|
|
|
|
Interest paid
|
|
$
|
18,105
|
|
|
$
|
18,035
|
|
Income taxes paid
|
|
$
|
628,441
|
|
|
$
|
523,597
|
|
|
|
|
|
|
|
|
|
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20170228006763/en/
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
|
|