Ross Stores Reports Results for Fourth Quarter and Fiscal 2000
NEWARK, Calif., March 14 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 14 weeks ended February 3, 2001 increased 4% to $.56 from pro forma earnings per share of $.54 for the 13 weeks ended January 29, 2000. Net earnings for the 14 weeks ended February 3, 2001 totaled $45.2 million, compared to pro forma net earnings for the 13 weeks ended January 29, 2000 of $48.2 million. Sales for the fourth quarter of 2000 increased 12% to $779 million with comparable store sales down 1% versus a 2% increase in the prior year.
For the 53 weeks ended February 3, 2001, earnings per share increased 7% to $1.82 compared to pro forma earnings per share of $1.70 for the 52 weeks ended January 29, 2000. Net earnings for 53 weeks ended February 3, 2001 totaled $151.8 million, compared to pro forma net earnings of $155.6 million for the 52 weeks ended January 29, 2000. Sales for the 2000 fiscal year increased 10% to $2.709 billion, with comparable store sales up 1% vs. a 6% increase in the prior year.
The 53rd week in fiscal 2000 added $40 million in revenue and $.07 in earnings per share to fourth quarter and fiscal 2000 results. Full year and fourth quarter fiscal 1999 results are pro forma to reflect the exclusion of a pre-tax charge of $9.0 million, or $.06 per share, for non-recurring expenses related to litigation.
Michael Balmuth, Vice Chairman and Chief Executive Officer, said, "The more difficult external environment, together with the merchandising issues we identified earlier this year, continued to impact both sales and earnings growth in the fourth quarter. In response, we have been taking steps to strengthen our merchandise offerings with more compelling assortments of fresh and exciting name-brand fashions at competitive discounts for the family and the home. We expect these efforts to be fully implemented during the second quarter of 2001.
Mr. Balmuth continued, "Tight inventory controls during the fourth quarter helped to maintain in-store turns and to minimize markdowns. Gross margin declined 32 basis points, mainly due to higher freight costs as a percent of sales. General, selling and administrative costs rose 129 basis points, primarily due to higher store payroll, benefits and distribution expenses and loss of leverage from the decline in same store sales. As a result, operating margin for the fourth quarter was 9.7%, compared to 11.3% on a pro forma basis for the fourth quarter of 1999."
"The company's financial position and cash flows remain strong, enabling us to make significant progress with our stock repurchase program. During fiscal 2000, we repurchased a total of 10.1 million shares for an aggregate purchase price of $169 million and ended the year with 80.5 million shares of common stock outstanding. These shares were repurchased under a two-year $300 million stock repurchase program announced in February 2000. The company expects to complete the remaining buyback authorization under this program in fiscal 2001," said Mr. Balmuth.
Mr. Balmuth continued, "Our expansion program also remains on track. We opened 34 new stores and closed 3 older locations during the year, resulting in 8% square footage growth. During 2001, we plan to accelerate new store expansion with a net addition of 35 to 40 locations, or 9% to 10% unit growth. About 10 to 12 of these stores will open in our new southeast markets of Georgia, North Carolina and South Carolina."
On a more recent note, Mr. Balmuth said, "Last week we reiterated our forecast for same store sales to be flat to down 3% for both March and April. Our plan called for softer sales in the first half of March, with business expected to strengthen as we move closer to Easter. Similar to other retailers, however, we believe that unseasonable weather trends negatively affected our business last week. For the first nine days of March, comparable store sales are below plan at down 6% from the prior year. It is still very early in the quarter, and it would be premature to change our outlook. However, if recent same store sales trends do not improve, we believe that earnings per share for the first quarter would be lower than the current forecasted range of $.44 to $.47. This compares to $.47 in earnings per share for the first quarter ended April 29, 2000."
The company will host a conference call on Wednesday, March 14, 2001 at 11:00 a.m. eastern time to communicate additional details concerning the quarter's results and management's outlook and plans for 2001. Interested parties may access the call by dialing 973-321-1030. In addition, a real time audio webcast of the conference call will be available at www.rossstores.com. An audio playback will be available at 402-220-5900, pin#2342 through March 21, 2001.
Forward-Looking Statements: 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 "expect," "anticipate," "estimate," "believe" and similar expressions identify forward-looking statements. Risk factors include obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, unseasonable weather trends, and greater than planned operating costs. Other risk factors are detailed in the company's Form 10-K for fiscal 1999. 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 the company's outlook at any other point in time. The company does not undertake to update these forward-looking statements.
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 409 stores in operation February 3, 2001, compared to 378 stores at the end of the same period last year.
ROSS STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended Twelve Months Ended February 3, January 29, February 3, January 29, ($000, except per share 2001 2000 2001 2000 data, unaudited) Sales $779,107 $694,517 $2,709,039 $2,468,638 Costs and Expenses Cost of goods sold and occupancy 543,683 482,379 1,873,284 1,702,342 General, selling and administrative 148,184 123,120 538,726 472,822 Depreciation and amortization 11,848 10,406 44,377 38,317 Interest expense (income) 1,095 (489) 3,466 (322) Provision for litigation expense 0 9,000 0 9,000 704,810 624,416 2,459,853 2,222,159 Earnings before income taxes 74,297 70,101 249,186 246,479 Provision for taxes on earnings 29,050 27,409 97,432 96,373 Net earnings $45,247 $42,692 $151,754 $150,106 Earnings per share Basic $0.56 $0.48 $1.84 $1.66 Diluted $0.56 $0.48 $1.82 $1.64 Weighted average shares outstanding Basic 80,742 88,616 82,619 90,416 Diluted 81,429 89,507 83,337 91,671 Stores open end of period 409 378 409 378 ROSS STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
February 3, January 29, ($000, unaudited) 2001 2000
Current Assets Cash and cash equivalents $37,154 $79,329 Accounts receivable 14,421 15,689 Merchandise inventory 559,565 500,494 Other current assets 19,929 17,682 Total Current Assets $631,069 $613,194 Property and equipment, net 301,665 273,164 Lease rights, deferred income taxes and other assets 42,313 61,320 $975,047 $947,678
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses and other $434,065 $422,470 Total Current Liabilities $434,065 $422,470 Long-term debt 30,000 0 Other liabilities 43,435 51,777 Stockholders' Equity 467,547 473,431 $975,047 $947,678
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./