UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report: March 16, 2004

 

Commission file number  0-14678

 

ROSS STORES, INC.

(Exact name of registrant as specified in its charter)

 

 

Former name, former address and former fiscal year, if changed since last report   N/A

 

 

 

Item 7.  Exhibits.

 

Exhibit No.		Description
99.1		March 16, 2004 Press Release by Ross Stores, Inc.*

 

* Pursuant to Item 12 of Form 8-K, Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 12.  Results of Operations and Financial Condition

 

On March 16, 2004, the Company issued a press release regarding the Company’s sales and earnings results for its fourth fiscal quarter and fiscal year ended January 31, 2004.  The full text of the Company’s press release is attached hereto as Exhibit 99.1.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned thereunto duly authorized.

 

	ROSS STORES, INC.
	Registrant
Date:     March 16, 2004	/s/J. Call
	John G. Call
	Senior Vice President, Chief Financial Officer, Principal
	Accounting Officer and Corporate Secretary

 

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Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Contact:		John G. Call		Katie Loughnot
		Senior Vice President,		Vice President, Investor Relations
		Chief Financial Officer		(510) 505-4509
		(510) 505-4315		email:  katie.loughnot@ros.com

 

ROSS STORES REPORTS RECORD RESULTS
FOR FOURTH QUARTER AND FISCAL 2003

 

Newark, California, March 16, 2004 —  Ross Stores, Inc. (NASDAQ: ROST) today reported that earnings per share for the 13 weeks ended January 31, 2004 grew 30% to $.48, on top of a 19% increase in the fourth quarter of 2002.  Earnings per share for the 13 weeks ended February 1, 2003 were $.37.  Net earnings for the 13 weeks ended January 31, 2004 totaled $73.7 million, up 26% over net earnings of $58.7 million for the 13 weeks ended February 1, 2003.   Sales for the fourth quarter of 2003 increased 14% to $1.099 billion with comparable store sales up 4% over the prior year.

 

For the 52 weeks ended January 31, 2004, earnings per share grew 17% to a record $1.47 on top of a 32% gain in earnings per share in the prior year.  For the 52 weeks ended February 1, 2003, earnings per share were $1.26.   Net earnings for the 52 weeks ended January 31, 2004 increased 13% to $228.1 million, compared to $201.2 million for the 52 weeks ended February 1, 2003.  Sales for the 2003 fiscal year rose 11% to $3.921 billion, with comparable store sales up 1% on top of a 7% gain in the prior year.

 

Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, “We are pleased with the solid sales and earnings gains we posted during the fourth quarter and fiscal 2003, which reflect our strengthening momentum as the year progressed.  The strongest geographic markets in the fourth quarter were Arizona, Texas, the Southeast and California, all posting solid same store sales gains in the mid to high single digits.  The strongest merchandise departments were Home, Accessories and Juniors, with comparable store sales gains in the high single digits for the quarter.”

 

Mr. Balmuth continued, “Fourth quarter results benefited from a 104 basis point expansion in operating margin to 11.0%, reflecting our continued effective inventory and expense controls.  Gross margin increased 93 basis points, mainly due to lower markdowns, while selling, general and administrative expenses as a percentage of sales declined by 11 basis points, primarily due to leverage on the comparable store sales gain during the period.”

 

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Mr. Balmuth continued, “During fiscal 2003, cash flow from operations funded capital investments in new store growth and infrastructure, as well as the Company’s stock repurchase and dividend programs.  We repurchased 6.9 million shares of common stock during fiscal 2003 for an aggregate purchase price of $150 million, ending the year with 151.2 million shares of common stock outstanding.   We also recently announced that our Board of Directors approved a record 48% increase in the Company’s quarterly cash dividend to $.0425 per common share in addition to a new two-year $350 million stock repurchase program for 2004 and 2005.  These actions reflect the Board’s and management’s ongoing commitment to enhancing stockholder value, as well as our confidence in the Company’s long-term growth prospects.”

 

“Our accelerated expansion program also remains on track.  We added a record 61 net new stores during 2003, or unit growth of 12%.  Expansion into new geographic markets continued, with 21 of these additions in our relatively new Southeast states of Georgia, North Carolina, South Carolina, Alabama, Louisiana and Tennessee.  During 2004, we are forecasting 14% total unit growth with plans for 70 new Ross locations.  In addition, the first ten dd’s DISCOUNTS^SM, our new retail concept targeting the needs of lower-income households, are targeted to open in the second half of the year,” said Mr. Balmuth.

 

The Company will host a conference call on Tuesday, March 16, 2004 at 11:00 a.m. Eastern time to communicate additional details concerning the quarter’s and year’s results and management’s outlook and plans for 2004.  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 23, 2004. 

 

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 “plan,” “expect,” “believe,” “anticipate,” “forecast,”  “estimate,”  “projected,” “guidance,” and similar expressions identify forward-looking statements.  Risk factors for Ross Stores and dd’s DISCOUNTS^SM include obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in general economic or geopolitical conditions, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, the Company’s ability to successfully implement various new supply chain and merchandising systems in a timely and cost-effective manner, unseasonable weather trends and greater than planned operating costs.  In addition, the Company is evaluating whether it will incur a potential non-cash charge to write-down the value of the Company’s Newark headquarters and distribution center to current fair market value.  Other risk factors are detailed in the Company’s Form 10-K for fiscal 2002.  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 or revise these forward-looking statements.

 

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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 568 stores at January 31, 2004, compared to 507 stores at the end of the same period last year.   Additional information is available at www.rossstores.com.

 

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ROSS STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

		Three Months Ended						Twelve Months Ended
($000, except per share data, unaudited)		January 31, 2004			February 1, 2003			January 31, 2004			February 1, 2003
Sales		$	1,098,749		$	964,610		$	3,920,583		$	3,531,349
Costs and Expenses
Cost of goods sold, including related buying, distribution and occupancy costs		810,236			720,284			2,917,935			2,628,412
Selling, general and administrative		167,425			148,081			628,359			572,316
Interest (income) expense, net		11			(214		)	(262		)	279
Total costs and expenses		977,672			868,151			3,546,032			3,201,007
Earnings before income taxes		121,077			96,459			374,551			330,342
Provision for taxes on earnings		47,341			37,716			146,449			129,164
Net earnings		$	73,736		$	58,743		$	228,102		$	201,178
Earnings per share
Basic		$	0.49		$	0.38		$	1.50		$	1.29
Diluted		$	0.48		$	0.37		$	1.47		$	1.26
Weighted average shares outstanding (000)
Basic		150,725			154,944			152,165			156,246
Diluted		154,030			158,086			155,151			159,492
Stores open end of period		568			507			568			507

 

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ROSS STORES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

($000, unaudited)		January 31, 2004			February 1, 2003
Current Assets
Cash and cash equivalents		$	201,546		$	150,649
Accounts receivable		25,292			18,349
Merchandise inventory		841,491			716,518
Prepaid expenses and other		29,467			36,904
Deferred income taxes		22,742			16,645
Total Current Assets		$	1,120,538		$	939,065
Property and equipment, net		484,199			402,683
Other long-term assets		52,473			36,242
Total Assets		$	1,657,210		$	1,377,990
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, accrued expenses and other		$	702,698		$	610,894
Income taxes payable		9,146			15,790
Total Current Liabilities		$	711,844		$	626,684
Long-term debt		50,000			25,000
Other liabilities		60,238			41,452
Deferred income taxes		79,709			41,666
Stockholders’ Equity		755,419			643,188
Total Liabilities and Stockholders' Equity		$	1,657,210		$	1,377,990

 

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ROSS STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

($000, unaudited)		Year Ended January 31, 2004			Year Ended February 1, 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings		$	228,102		$	201,178
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		76,739			66,176
Deferred income taxes		31,946			17,375
Tax benefit from equity issuances		15,089			16,584
Change in assets and liabilities:
Merchandise inventory		(124,973		)	(93,128		)
Other current assets, net		494			(4,003		)
Accounts payable		48,881			81,958
Other current liabilities		34,309			54,541
Other		4,719			8,348
Net cash provided by operating activities		315,306			349,029
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to property and equipment		(146,529		)	(133,166		)
Net cash used in investing activities		(146,529		)	(133,166		)
CASH FLOWS USED IN FINANCING ACTIVITIES
Proceeds from long-term debt		25,000			25,000
Issuance of common stock related to stock plans, net		24,695			34,279
Repurchase of common stock		(150,003		)	(149,997		)
Dividends paid		(17,572		)	(14,847		)
Net cash used in financing activities		(117,880		)	(105,565		)
Net increase in cash and cash equivalents		50,897			110,298
Cash and cash equivalents:
Beginning of period		150,649			40,351
End of period		$	201,546		$	150,649

 

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