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Ross Stores Reports First Quarter Earnings, Provides Second Quarter 2019 Guidance

DUBLIN, Calif.--(BUSINESS WIRE)--May 23, 2019-- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 13 weeks ended May 4, 2019 of $1.15, up from $1.11 for the same period last year. Net earnings for the 2019 first quarter were $421 million, compared to $418 million in the prior year. These results include an approximate $.02 per share benefit from the favorable timing of expenses that are expected to reverse over the balance of the year. Sales for the period grew 6% to $3.8 billion, with comparable store sales up 2%.

Barbara Rentler, Chief Executive Officer, commented, “For the first quarter, we delivered sales gains at the high end of our guidance as well as better-than-expected earnings per share growth despite continued underperformance in Ladies apparel. While operating margin of 14.1% was down from the prior year, it was above plan mainly due to higher merchandise margin. As expected, this improvement was more than offset by increases in freight and wage costs and the timing of packaway-related expenses that benefited the prior year period.”

Ms. Rentler continued, “During the first quarter of fiscal 2019, we repurchased 3.4 million shares of common stock for an aggregate price of $320 million. As planned, we remain on track to buy back a total of $1.275 billion in common stock during fiscal 2019.”

Looking ahead, Ms. Rentler said, “For the 13 weeks ending August 3, 2019, we are forecasting same store sales to be up 1% to 2% on top of a 5% gain last year. Second quarter 2019 earnings per share are projected to be $1.06 to $1.11, up from $1.04 in the prior year period.”

Ms. Rentler continued, “Based on our first quarter results and guidance for the second quarter, we now project earnings per share for the 52 weeks ending February 1, 2020 to be in the range of $4.38 to $4.52, up from $4.26 last year, which included a $.07 per share benefit in the fourth quarter from the favorable resolution of a tax matter.”

The Company will host a conference call on Thursday, May 23, 2019 at 4:15 p.m. Eastern time to provide additional details concerning its first quarter results and management’s outlook for the second quarter of fiscal 2019. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at An audio playback will be available at 404-537-3406, PIN #6291179 until 8:00 p.m. Eastern time on May 30, 2019, as well as on the Company’s website.

Forward-Looking Statements:This press release contains forward-looking statements regarding expected sales, earnings levels, new store growth, 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,” “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, competitive pressures in the apparel or home-related merchandise retailing industry; changes in the level of consumer spending on or preferences for apparel and 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 that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores; 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; 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; our ability to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margin; changes in U.S. tax 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 adverse outcome in various legal, regulatory, or tax matters; a 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; 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 2018, and Form 10-Q and Form 8-Ks for fiscal 2019.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 2018 revenues of $15.0 billion. As of May 4, 2019, the Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,502 locations in 38 states, the District of Columbia, and Guam. 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 243 dd’s DISCOUNTS® in 18 states 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

Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
          Three Months Ended
($000, except stores and per share data, unaudited)   May 4, 2019   May 5, 2018
Sales     $ 3,796,642     $ 3,588,619  
Costs and Expenses          
  Cost of goods sold       2,701,668       2,522,219  
  Selling, general and administrative       558,250       524,423  
  Interest income, net       (5,635 )     (503 )
    Total costs and expenses       3,254,283       3,046,139  
Earnings before taxes       542,359       542,480  
Provision for taxes on earnings       121,217       124,228  
Net earnings     $ 421,142     $ 418,252  
Earnings per share          
  Basic     $ 1.16     $ 1.12  
  Diluted     $ 1.15     $ 1.11  
Weighted average shares outstanding (000)      
  Basic       363,085       373,797  
  Diluted       365,912       377,062  
Stores open at end of period       1,745       1,651  
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000, unaudited)   May 4, 2019   May 5, 2018
Current Assets        
  Cash and cash equivalents   $ 1,366,592   $ 1,302,836
  Accounts receivable     121,607     109,425
  Merchandise inventory     1,813,773     1,895,456
  Prepaid expenses and other     160,733     146,362
    Total current assets     3,462,705     3,454,079
Property and equipment, net     2,436,372     2,369,215
Operating lease assets     2,942,980     -
Other long-term assets     207,063     197,542
Total assets   $ 9,049,120   $ 6,020,836
Liabilities and Stockholders’ Equity        
Current Liabilities        
  Accounts payable   $ 1,296,183   $ 1,299,145
  Accrued expenses and other     450,762     435,606
  Current operating lease liabilities     536,900     -
  Accrued payroll and benefits     220,376     209,570
  Income taxes payable     89,290     77,323
  Current portion of long-term debt     -     84,981
    Total current liabilities     2,593,511     2,106,625
Long-term debt     312,552     312,105
Non-current operating lease liabilities     2,514,530     -
Other long-term liabilities     226,788     362,445
Deferred income taxes     134,213     109,373
Commitments and contingencies        
Stockholders’ Equity     3,267,526     3,130,288
Total liabilities and stockholders’ equity   $ 9,049,120   $ 6,020,836
Ross Stores, Inc.  
Condensed Consolidated Statements of Cash Flows  
        Three Months Ended
($000, unaudited)   May 4, 2019   May 5, 2018
Cash Flows From Operating Activities        
Net earnings   $ 421,142   $ 418,252
Adjustments to reconcile net earnings to net cash        
provided by operating activities:        
  Depreciation and amortization   82,757   79,797
  Stock-based compensation   19,689   23,760
  Deferred income taxes   16,543   16,842
  Change in assets and liabilities:        
    Merchandise inventory   (63,331)   (253,721)
    Other current assets   (41,777)   (46,028)
    Accounts payable   122,654   238,677
    Other current liabilities   (108,208)   (95,966)
    Income taxes   56,206   90,322
    Operating lease assets and liabilities, net   2,855   -
    Other long-term, net   457   115
    Net cash provided by operating activities   508,987   472,050
Cash Flows From Investing Activities        
Additions to property and equipment   (95,629)   (79,793)
Proceeds from investments   517   505
    Net cash used in investing activities   (95,112)   (79,288)
Cash Flows From Financing Activities        
Issuance of common stock related to stock plans   5,295   4,682
Treasury stock purchased   (50,880)   (44,798)
Repurchase of common stock   (320,130)   (255,370)
Dividends paid   (93,722)   (85,410)
    Net cash used in financing activities   (459,437)   (380,896)
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents (45,562)   11,866
Cash, cash equivalents, and restricted cash and cash equivalents:      
    Beginning of period   1,478,079   1,353,272
    End of period   $ 1,432,517   $ 1,365,138
  Cash and cash equivalents   $ 1,366,592   $ 1,302,836
  Restricted cash and cash equivalents included in prepaid expenses and other 11,867   8,900
  Restricted cash and cash equivalents included in other long-term assets 54,058   53,402
Total cash, cash equivalents, and restricted cash and cash equivalents: $ 1,432,517   $ 1,365,138
Supplemental Cash Flow Disclosures        
Interest paid   $ 4,219   $ 4,219
Income taxes paid   $ 48,468   $ 17,058


Source: Ross Stores, Inc.

Michael Hartshorn
Group Executive Vice President,
Chief Financial Officer
(925) 965-4503

Connie Kao
Vice President, Investor Relations
(925) 965-4668