Ross Stores Reports Record First Quarter Results
Ross Stores Reports Record First Quarter Results
NEWARK, Calif., May 19 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported record net earnings for the 13 weeks ended May 1, 1999 of $34.2 million, compared to $27.9 million for the 13 weeks ended May 2, 1998. Earnings per share for the same period increased 28% to $.73, compared to $.57 per share in the prior year. Current year first quarter sales totaled $551 million, up 14% from the $484 million in sales for the quarter ended May 2, 1998. Comparable store sales for the same period rose 7%. In commenting, Michael Balmuth, Vice Chairman and Chief Executive Officer, stated, "We are pleased with the continued strength of our business during the first quarter. Solid increases in sales were broadbased throughout most geographic regions and merchandise categories. We believe these results show that we remain on track with our value-focused strategies." Mr. Balmuth continued, "During the first quarter, our focus on more opportunistic buying, as well as ongoing strict controls of both inventories and expenses, enabled Ross to deliver a 75 basis point increase in operating income to 10.2% of sales, compared to 9.4% in the prior year period. As a percent of sales, gross margin increased by 68 basis points while general, selling and administrative expenses declined by 14 basis points. "Our expansion program also remained on schedule during the quarter. We opened six new stores, all in existing markets. These locations are the first of approximately 30 net new stores we plan to open in 1999. We currently expect to end the year with about 378 stores in 17 states," said Mr. Balmuth. In conclusion, Mr. Balmuth said, "Delivering value to stockholders remains a top priority at Ross as evidenced by our share repurchase program. During the first three months of 1999, we repurchased common stock for an aggregate investment of $36 million, representing about 30% of the total $120 million repurchase program authorization announced early in the year." Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain forward-looking statements which are subject to risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. These factors include competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, obtaining acceptable store locations, the company's ability to continue to purchase attractive name brand merchandise at desirable discounts, unseasonable weather trends, and larger than planned operating costs including those that could be related to necessary modifications to the company's computer hardware and software systems to enable them to process information with dates or date ranges spanning the year 2000 and beyond. The company presently believes that, with modifications to existing software and conversions to new software, the year 2000 issue will not pose significant operational problems for the company's computer systems as so modified and converted. However, if unforeseen difficulties arise or such modifications and conversions are not completed timely, or if the company's vendors' or suppliers' systems are not modified to become year 2000 compliant, then the year 2000 issue may have a material impact on the operations of the company. Other risk factors are detailed in the company's Form 10-K for fiscal 1998. Ross Stores, Inc. operates a national chain of off-price retail stores offering first quality, in-season, branded apparel and apparel-related merchandise for the entire family at prices that average 20% to 60% less than department and specialty stores, as well as merchandise for the home at similar savings. The company had 355 stores in operation May 1, 1999, compared to 331 stores at the end of the same period last year. ROSS STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended May 1, May 2, ($000, except per data share, unaudited) 1999 1998 Sales $ 550,825 $ 484,276 Costs and Expenses Cost of goods sold and occupancy 379,378 336,816 General, selling and administrative 106,192 94,057 Depreciation and amortization 9,320 7,882 Interest income (162) (135) 494,728 438,620 Earnings before income taxes 56,097 45,656 Provision for taxes on earnings 21,934 17,806 Net earnings $ 34,163 $ 27,850 Earnings per share Basic $ 0.74 $ 0.58 Diluted $ 0.73 $ 0.57 Weighted average shares outstanding Basic 45,964 47,849 Diluted 46,740 48,814 Stores open end of period 355 331 ROSS STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS May 1, May 2, ($000, unaudited) 1999 1998 ASSETS Current Assets Cash and cash equivalents $ 33,307 $ 29,725 Accounts receivable 15,199 10,513 Merchandise inventory 516,107 460,578 Other current assets 16,301 15,304 Total Current Assets $ 580,914 $ 516,120 Property and equipment, net 249,793 204,253 Lease rights, deferred income taxes and other assets 50,439 40,934 $ 881,146 $ 761,307 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable, accrued expenses and other $ 407,284 $ 336,950 Total Current Liabilities $ 407,284 $ 336,950 Other liabilities 45,570 40,085 Stockholders' Equity $ 428,292 $ 384,272 $ 881,146 $ 761,307 SOURCE Ross Stores, Inc.