Ross Stores Reports Results for Fourth Quarter and Fiscal 1999
NEWARK, Calif., March 15 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported that pro forma earnings per share for the 13 weeks ended January 29, 2000 increased 10% to $.54 from $.49 per share for the fourth quarter of 1998. Pro forma net earnings for the 13 weeks ended January 29, 2000 totaled $48.2 million, compared to $45.6 million for the 13 weeks ended January 30, 1999. Sales for the fourth quarter of 1999 increased 10% to $695 million with comparable store sales up 2%.
For the 52 weeks ended January 29, 2000, pro forma earnings per share increased 21% to $1.70 from $1.40 per share for the 52 weeks ended January 30, 1999. Pro forma net earnings totaled $155.6 million, compared to $133.8 million for the 52 weeks ended January 30, 1999. Sales for the 1999 fiscal year increased 13% to $2.469 billion, with comparable store sales up a solid 6%.
The fiscal 1999 and fourth quarter results reported above are pro forma for the exclusion of a pre-tax charge of $9.0 million, or $.06 per share, for non-recurring expenses related to litigation.
In commenting on these results, Vice Chairman and Chief Executive Officer Michael Balmuth stated, "We are pleased with the solid gains we achieved in both sales and earnings during fiscal 1999. Operating income for fiscal 1999 continued to benefit from our focus on better buying, strict inventory controls and improved sales productivity, which contributed to a 41 basis point expansion in gross margin. This improvement was partially offset by a 12 basis point increase in general, selling and administrative expenses before non-recurring litigation costs, due primarily to higher benefit costs, credit card fees and incentive plan costs. As a result, proforma operating margin in fiscal 1999 grew by 27 basis points to a record 10.3%, up from 10.1% in 1998."
About the company's financial position, Mr. Balmuth said, "Strong cash flows have enabled the company to internally fund store growth, repurchase stock, increase our dividend payouts and end the year with $79 million in cash and no debt on the balance sheet. Return on average stockholders' equity was maintained at a record 33% in 1999, benefiting from the solid growth in earnings and the repurchase of 5.4 million shares during the year at an aggregate cost of $120 million. In addition, on January 27, 2000, the Board of Directors approved a new two-year $300 million repurchase program for 2000 and 2001 as well as a 15% increase in the quarterly cash dividend payment. These actions reflect our ongoing commitment to enhancing stockholder returns."
In conclusion, he stated, "Looking ahead, we see opportunities to grow the business by effectively executing the strategies that have contributed to our record-breaking financial results to date -- ongoing investments in our merchandise organization and systems, further diversification of our product assortments, strict management of inventories and expenses, and continued square footage growth in existing markets during 2000 with entry into new states targeted for 2001 and beyond."
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. The words "looking ahead" and similar expressions identify forward-looking statements. Risk 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 costs. Other risk factors are detailed in the company's Form 10-K for fiscal 1998.
Ross Stores, Inc. operates a 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 378 stores in operation January 29, 2000, compared to 349 stores at the end of the same period last year.
NOTE TO ANALYSTS, INVESTORS AND MEDIA: Ross Stores, Inc. press releases are available on the Internet via the company's home page at http://www.rossstores.com. A conference call will be held at 11:00 a.m. EST on Wednesday, March 15th, to review these results and can be accessed live on the Internet at www.streetfusion.com. An audio playback of the conference call will be available at www.streetfusion.com through Wednesday, March 22nd.
ROSS STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Twelve Months Ended January 29, January 30, January 29, January 30, ($000, except 2000 1999 2000 1999 per share data, unaudited) Sales $694,517 $629,971 $2,468,638 $2,182,361 Costs and Expenses Cost of goods sold and occupancy 482,379 439,423 1,702,342 1,513,889 General, selling and administrative 123,120 107,279 472,822 415,284 Depreciation and amortization 10,406 8,749 38,317 33,514 Interest (income) expense (489) (200) (322) 259 Provision for litigation expense 9,000 0 9,000 0 624,416 555,251 2,222,159 1,962,946 Earnings before income taxes 70,101 74,720 246,479 219,415 Provision for taxes on earnings 27,409 29,141 96,373 85,572 Net earnings $42,692 $45,579 $150,106 $133,843 Earnings per share Basic $0.48 $0.49 $1.66 $1.42 Diluted $0.48 $0.49 $1.64 $1.40 Weighted average shares outstanding Basic 88,616 92,210 90,416 94,071 Diluted 89,507 93,584 91,671 95,700 Stores open end of period 378 349 378 349 ROSS STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
January 29, January 30, ($000, unaudited) 2000 1999 ASSETS Current Assets Cash and cash equivalents $79,329 $80,083 Accounts receivable 15,689 11,566 Merchandise inventory 500,494 466,460 Other current assets 17,682 15,825 Total Current Assets $613,194 $573,934 Property and equipment, net 273,164 248,712 Lease rights, deferred income taxes and other assets 61,320 47,660 $947,678 $870,306
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities Accounts payable, accrued expenses and other $404,754 $384,047 Income taxes payable 17,716 19,092 Total Current Liabilities $422,470 $403,139 Other liabilities 51,777 42,464 Stockholders' Equity 473,431 424,703 $947,678 $870,306
SOURCE Ross Stores, Inc.
CONTACT: John G. Call, Senior Vice President & Chief Financial Officer, 510-505-4315, or Katie Loughnot, Director, Investor Relations, 510-505-4509, or firstname.lastname@example.org, both of Ross Stores, Inc./