Ross Stores Reports Second Quarter Earnings
NEWARK, Calif., Aug. 16 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported net earnings for the 13 weeks ended July 29, 2000 of $35.9 million, compared to $38.6 million for the 13 weeks ended July 31, 1999. Earnings per share for the same period increased 2% to $.43, from $.42 in the prior year. Current year second quarter sales totaled $657 million, up 7% from the $615 million in sales for the quarter ended July 31, 1999. Comparable store sales for the period were even with the prior year.
For the six months ended July 29, 2000, net earnings totaled $76.8 million, compared to $72.8 million for the same period in 1999. Earnings per share for the first six months increased 15% to $.90, up from $.78 in the prior year. Sales for the first six months grew 11% to $1.290 billion, with same store sales up 3% for the period.
Michael Balmuth, Vice Chairman and Chief Executive Officer, said, "As anticipated, sales and earnings growth in the second quarter showed a marked slowdown from our first quarter performance due mainly, we believe, to a softening in consumer spending and a more promotional climate compared to last year, particularly in the department store sector. Looking ahead, our outlook for the back half of the year remains cautious, as the environment continues to be difficult. Same store sales for the first two weeks of August are down 4%. Although it is too early to accurately predict third quarter results, if this trend continues, we believe that earnings per share for the third quarter of 2000 would fall below last year's level of $.38. On a more positive note, we are seeing increased opportunities in the marketplace to purchase name brand merchandise at very compelling values, which should enhance our prospects for the longer term.
"I am pleased to report that Jim Peters joined Ross on August 14th as President and Chief Operating Officer and a Director of our company," continued Mr. Balmuth. "He replaces Mel Wilmore, who retired earlier this year. Prior to joining Ross, Jim was President of U.S. Stores for Staples, directing a network of approximately 900 locations. We believe that his in-depth operating experience and business acumen will be valuable resources in addressing the challenges we face in today's tough retail environment."
Mr. Balmuth continued, "The company's strong financial position and cash flows have enabled us to make significant progress with our stock repurchase program. During the first six months of 2000, we repurchased a total of 7.5 million shares for an aggregate purchase price of $128 million. We ended the quarter with 82.0 million shares of common stock outstanding. We believe that our repurchase program is an excellent use of cash and currently expect to buy back more than half of the two-year $300 million authorization we announced in February during this fiscal year.
"Our expansion program remains on schedule. During the first six months of the year, we opened 14 new stores, all in existing markets. We expect to add 20 new stores in the third quarter, our largest group of store openings this year. After closing four older locations, we plan to end fiscal 2000 with about 408 stores in 17 states," said Mr. Balmuth.
The company will provide additional details concerning its second quarter results and business outlook on a conference call to be held on Wednesday, August 16, 2000 at 11:00 a.m. EDT. Participants may listen to a real time audio webcast of the conference call by visiting the company's newly renovated web site located at www.rossstores.com. A recorded version of the call will remain available at the same location through Wednesday, August 23, 2000.
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 company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes indicate that any projected results expressed or implied therein will not be realized.
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 392 stores in operation July 29, 2000, compared to 363 stores at the end of the same period last year.
ROSS STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended Six Months Ended July 29, July 31, July 29, July 31, 2000 1999 2000 1999 ($000, except per share data, unaudited) Sales $657,035 $614,576 $1,290,463 $1,165,401 Costs and Expenses Cost of goods sold and occupancy 455,797 424,143 890,222 803,521 General, selling and administrative 130,646 117,677 252,092 223,869 Depreciation and amortization 10,772 9,132 21,250 18,452 Interest expense (income) 835 182 840 20 598,050 551,134 1,164,404 1,045,862 Earnings before income taxes 58,985 63,442 126,059 119,539 Provision for taxes on earnings 23,063 24,806 49,289 46,740 Net earnings $35,922 $38,636 $76,770 $72,799 Earnings per share Basic $0.43 $0.42 $0.91 $0.80 Diluted $0.43 $0.42 $0.90 $0.78 Weighted average shares outstanding Basic 82,753 91,132 84,020 91,530 Diluted 83,530 92,734 84,853 93,102 Stores open end of period 392 363 392 363 ROSS STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS July 29, July 31, ($000, unaudited) 2000 1999 ASSETS Current Assets Cash and cash equivalents $41,948 $30,119 Accounts receivable 16,217 14,824 Merchandise inventory 577,569 522,904 Other current assets 19,061 16,177 Total Current Assets $654,795 $584,024 Property and equipment, net 283,492 255,019 Lease rights, deferred income taxes and other assets 62,338 51,772 $1,000,625 $890,815 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable, accrued expenses and other $419,403 $385,370 Income taxes payable 20,071 21,803 Total Current Liabilities $439,474 $407,173 Long-term debt 80,000 0 Other liabilities 53,704 47,703 Stockholders' Equity 427,447 435,939 $1,000,625 $890,815
SOURCE Ross Stores, Inc.
NOTE TO EDITORS: Ross Stores, Inc. press releases are available on the Internet via the company's home page at http://www.rossstores.com.
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.