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Ross Stores Reports Record First Quarter 2009 Results, Provides Second Quarter and Updated Fiscal 2009 Guidance
PLEASANTON, Calif.,
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, "We are very pleased with our strong sales and earnings results in the first quarter, which were well ahead of plan. This performance is especially noteworthy considering that it was achieved in one of the most challenging economic and retail environments on record. Our business benefited mainly from our ability to offer customers fresh and exciting name brand bargains, as we continue to take advantage of the substantial amount of close-out opportunities in the marketplace. The best performing merchandise categories during the period were Dresses and Shoes, while the strongest region was the Mid-Atlantic."
Mr. Balmuth continued, "Operating margin for the quarter grew about 75 basis points to 8.9%, primarily driven by a 90 basis point improvement in gross margin. Partially offsetting this gain was a 15 basis point increase in selling, general and administrative costs versus the prior year. Last year benefited by about 30 basis points from income related to the previously mentioned real estate settlement."
Mr. Balmuth also noted, "Our balance sheet and cash flows remain healthy.
We continued to return capital to stockholders during the quarter through our
stock repurchase and dividend programs. During the first three months of
fiscal 2009, we repurchased 2.2 million shares of common stock for an
aggregate purchase price of
Looking ahead, Mr. Balmuth said, "While the external environment remains challenging, our much better-than-expected results year-to-date reflect that consumers are continuing to respond very favorably to the compelling values we offer. As a result, we have increased our sales and earnings outlook for the second quarter and the back half of 2009."
"For the second quarter ending
Based on these updated sales targets, the Company is projecting second
quarter earnings per share to be in the range of
The Company will provide additional details concerning its first quarter
results and management's outlook for the second quarter and the full year on a
conference call to be held on
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Forward-Looking Statements: This press release and the recorded
conference call on our corporate website contain forward-looking statements
regarding expected sales and earnings levels 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
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* * * * *
Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
Three Months Ended
------------------
($000, except stores and per share data, May 2, May 3,
unaudited) 2009 2008
---------------------------------------- ---- ----
Sales $1,691,599 $1,556,328
Costs and expenses
Cost of goods sold 1,268,709 1,181,557
Selling, general and
administrative 272,030 247,672
Interest expense (income), net 1,656 (1,621)
----- ------
Total costs and expenses 1,542,395 1,427,608
Earnings before taxes 149,204 128,720
Provision for taxes on earnings 57,817 49,235
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Net earnings $91,387 $79,485
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Earnings per share
Basic $0.73 $0.61
Diluted $0.72 $0.60
Weighted average shares outstanding (000)
Basic 124,692 131,319
Diluted 126,564 133,314
Dividends per share
Cash dividends declared per share $- $-
Stores open at end of period 974 918
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
May 2, May 3,
($000, unaudited) 2009 2008
----------------- ---- ----
Assets
Current Assets
Cash and cash equivalents $459,302 $305,804
Short-term investments 1,033 2,237
Accounts receivable 50,098 48,892
Merchandise inventory 917,661 1,028,576
Prepaid expenses and other 65,557 61,263
Deferred income taxes 13,487 20,149
------ ------
Total current assets 1,507,138 1,466,921
Property and equipment, net 942,432 870,556
Long-term investments 33,411 40,430
Other long-term assets 59,139 66,486
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Total assets $2,542,120 $2,444,393
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $682,251 $661,847
Accrued expenses and other 225,564 225,562
Accrued payroll and benefits 134,571 118,094
Income taxes payable 46,333 42,672
------ ------
Total current liabilities 1,088,719 1,048,175
Long-term debt 150,000 150,000
Other long-term liabilities 163,687 169,487
Deferred income taxes 103,956 82,506
Commitments and contingencies
Stockholders' Equity 1,035,758 994,225
--------- -------
Total liabilities and stockholders'
equity $2,542,120 $2,444,393
========== ==========
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended
------------------
May 2, May 3,
($000, unaudited) 2009 2008
----------------- ---- ----
Cash Flows From Operating Activities
Net earnings $91,387 $79,485
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 37,556 33,048
Stock-based compensation 6,497 5,196
Deferred income taxes 7,405 3,097
Tax benefit from equity issuance 2,821 3,149
Excess tax benefit from stock-based
compensation (2,064) (2,167)
Change in assets and liabilities:
Merchandise inventory (36,603) (3,281)
Other current assets, net (19,244) (20,766)
Accounts payable 159,514 37,428
Other current liabilities (6,455) 19,620
Other long-term, net (82) 6,026
--- -----
Net cash provided by operating activities 240,732 160,835
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Cash Flows From Investing Activities
Additions to property and equipment (33,914) (42,278)
Proceeds from sale of property and equipment 10 108
Net proceeds from investments 4,577 2,838
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Net cash used in investing activities (29,327) (39,332)
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Cash Flows From Financing Activities
Excess tax benefit from stock-based compensation 2,064 2,167
Issuance of common stock related to stock plans 19,689 16,820
Treasury stock purchased (4,073) (2,542)
Repurchase of common stock (77,171) (77,192)
Dividends paid (13,967) (12,532)
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Net cash used in financing activities (73,458) (73,279)
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Net increase in cash and cash equivalents 137,947 48,224
Cash and cash equivalents:
Beginning of period 321,355 257,580
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End of period $459,302 $305,804
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Supplemental Cash Flow Disclosures
Income taxes paid 9,866 21,961
Non-Cash Investing Activities
Increase (decrease) in fair value of investment
securities $209 $(1,359)
SOURCE
CONTACT:
or Bobbi Chaville, Senior Director, Investor Relations,
+1-925-965-4289, bobbi.chaville@ros.com
Web Site: http://www.rossstores.com