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 (date of earliest event
reported):
August 22, 2007
ROSS STORES, INC.
(Exact name of registrant
as specified in its charter)
Delaware | 0-14678 | 94-1390387 |
(State or other jurisdiction of | (Commission File No.) | (I.R.S. Employer Identification |
incorporation) | No.) |
4440 Rosewood Drive, Pleasanton,
California, 94588-3050
(Address of
principal executive offices)
Registrants telephone number, including
area code:
(925) 965-4400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ROSS STORES, INC. | 4440 Rosewood Drive, Pleasanton, California 94588-3050 | (925) 965-4400 |
Item 2.02 Results of Operations and Financial Condition.
On August 22, 2007, the Company issued a press release regarding the Companys financial results for its fiscal quarter ended August 4, 2007. The full text of the Companys press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit | |
No. | Description |
99.1 | August 22, 2007 Press Release by Ross Stores, Inc.* |
*Pursuant to Item 2.02 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 22, 2007
ROSS STORES, INC. | ||
Registrant | ||
By: | /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 | (925) 965-4509 | |
(925) 965-4315 | Email: katie.loughnot@ros.com |
ROSS STORES REPORTS SECOND QUARTER EARNINGS
AND PROVIDES SECOND HALF 2007 SALES AND EARNINGS GUIDANCE
Pleasanton, California, August 22, 2007 -- Ross Stores, Inc. (ROST) today reported earnings per share for the 13 weeks ended August 4, 2007 of $.37 and net earnings of $50.9 million. For the 13 weeks ended July 29, 2006, earnings per share were $.32 and net earnings totaled $45.4 million. Fiscal 2007 second quarter sales increased 10% to $1.445 billion, with comparable store sales for the period up 2% on top of a 4% increase in the prior year.
For the six months ended August 4, 2007, earnings per share were $.85 and net earnings totaled $117.9 million. For the six months ended July 29, 2006, earnings per share were $.73 and net earnings totaled $104.6 million. Sales for the first six months of 2007 increased 10% to $2.855 billion, with comparable store sales up 1% on top of a 5% gain in the prior year.
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, The strongest sales gains during the second quarter were in the Northwest and the Mid Atlantic, while Dresses and Home were the best-performing merchandise categories. As a percent of sales, lower general and administrative and occupancy expenses more than offset higher freight, distribution and store costs, resulting in a 20 basis point improvement in operating margin for the quarter.
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Mr. Balmuth also noted, Our balance sheet and cash flows remained healthy as we ended the first half of the year. We continued to return capital to stockholders through our stock repurchase and dividend programs. During the first six months of 2007, we repurchased 3.1 million shares of common stock for an aggregate of $101 million. We are on track to complete during 2007 the remaining $99 million of our two-year $400 million stock repurchase program authorized by our Board of Directors.
Mr. Balmuth continued, Looking ahead, we are slightly more cautious now in our second half outlook as a result of a combination of macro economic factors, recent results and projections from other retailers, and our own sales trend that slowed versus plan beginning in mid-July. Although we hope to perform better, in light of these issues, we believe it is prudent to manage our business with somewhat more conservative sales and margin assumptions for the balance of the year.
We are now projecting same store sales growth of 1% to 3% for the third and fourth quarters, compared to our prior forecast of up 3% to 4% for both periods. Earnings per share are projected to be in the range of $.33 to $.37 for the 13 weeks ending November 3, 2007 and $.62 to $.68 for the 13 weeks ending February 2, 2008. Based on these projections, earnings per share for the fiscal year ending February 2, 2008 are forecast to be in the range of $1.80 to $1.90. This compares to our original earnings per share guidance of $1.85 to $1.95, Mr. Balmuth concluded.
Reported earnings per share for the fiscal 2006 third quarter, fourth quarter and fiscal year were $.31, $.66 and $1.70, respectively. In addition, last years fourth quarter and fiscal year results included income equivalent to about $.07 per share related to the 53rd week in fiscal 2006.
The Company will provide additional details concerning its second quarter results, projected second half guidance and its longer-term business outlook on a conference call to be held on Wednesday, August 22, 2007 at 11:00 a.m. Eastern Time. Participants may listen to a real time audio webcast of the conference call by visiting the Companys website located at www.rossstores.com. A recorded version of the call will also be available through November 2, 2007 at the website address and through August 29, 2007 via a telephone recording at 402-220-5900, PIN #2342.
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Forward-Looking Statements: This press release and the recorded conference call comments on our website contain forward-looking statements regarding expected sales and earnings levels that are subject to risks and uncertainties which could cause our actual results to differ materially from managements current expectations. The words plan, expect, anticipate, estimate, believe, forecast, projected, guidance, looking ahead and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (Ross) and dds DISCOUNTS ® include, without limitation, our ability to convert certain Albertsons LLC real estate sites to the Ross and dds DISCOUNTS formats in a timely and cost effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired store locations; our ability to effectively operate our various supply chain, core merchandising and other information systems; our ability to improve our merchandising capabilities through the implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in our distribution centers; potential pressure on freight costs from higher-than-expected fuel surcharges; obtaining acceptable new store locations; competitive pressures in the apparel industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise, including the potential impact from higher mortgage interest rates and higher gas prices; changes in geopolitical and general economic conditions; unseasonable weather trends; disruptions in supply chain; lower than planned gross margin, including higher than planned markdowns and higher than expected inventory shortage; greater than planned operating costs; our ability to continue to purchase attractive brand-name merchandise at desirable discounts; our ability to identify and successfully enter new geographic markets; and our ability to attract and retain personnel with the retail talent necessary to execute our strategies. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2006 and Form 10-Qs and 8-Ks for fiscal 2007. 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 our outlook at any other point in time. We do not undertake to update or revise these forward-looking statements.
* * * * *
Ross Stores, Inc., a Fortune 500 and Nasdaq 100 (ROST) company headquartered in Pleasanton, California, is the nations second largest off-price company with fiscal 2006 revenues of $5.6 billion. As of August 4, 2007, the Company operated 817 Ross Dress for Less® (Ross) stores and 45 dds DISCOUNTS® locations, compared to 744 Ross and 26 dds DISCOUNTS locations at the end of the same period last year. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 60 percent off department and specialty store regular prices. dds DISCOUNTS features a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 70 percent off moderate department and discount store regular prices. Additional information is available on the Companys website at www.rossstores.com.
* * * * *
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Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
Three Months Ended | Six Months Ended | ||||||||||||||
August 4, | July 29, | August 4, | July 29, | ||||||||||||
($000, except stores and per share data, unaudited) | 2007 | 2006 | 2007 | 2006 | |||||||||||
Sales | $ | 1,444,632 | $ | 1,308,052 | $ | 2,855,173 | $ | 2,599,728 | |||||||
Costs and expenses | |||||||||||||||
Cost of goods sold | 1,131,286 | 1,024,130 | 2,202,564 | 2,012,966 | |||||||||||
Selling, general and administrative | 229,326 | 210,635 | 459,529 | 417,802 | |||||||||||
Interest (income) expense, net | 65 | (1,554 | ) | (1,326 | ) | (3,438 | ) | ||||||||
Total costs and expenses | 1,360,677 | 1,233,211 | 2,660,767 | 2,427,330 | |||||||||||
Earnings before taxes | 83,955 | 74,841 | 194,406 | 172,398 | |||||||||||
Provision for taxes on earnings | 33,092 | 29,464 | 76,499 | 67,804 | |||||||||||
Net earnings | $ | 50,863 | $ | 45,377 | $ | 117,907 | $ | 104,594 | |||||||
Earnings per share | |||||||||||||||
Basic | $ | 0.37 | $ | 0.32 | $ | 0.86 | $ | 0.74 | |||||||
Diluted | $ | 0.37 | $ | 0.32 | $ | 0.85 | $ | 0.73 | |||||||
Weighted average shares outstanding (000) | |||||||||||||||
Basic | 136,052 | 140,348 | 136,569 | 140,991 | |||||||||||
Diluted | 138,280 | 142,698 | 138,992 | 143,454 | |||||||||||
Dividends per share | |||||||||||||||
Cash dividends declared per share | $ | 0.08 | $ | 0.06 | $ | 0.08 | $ | 0.06 | |||||||
Stores open at end of period | 862 | 770 | 862 | 770 |
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Ross Stores, Inc.
Condensed Consolidated Balance Sheets
August 4, | July 29, | |||||
($000, unaudited) | 2007 | 2006 | ||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 132,808 | $ | 59,351 | ||
Short-term investments | 31,263 | 7,417 | ||||
Accounts receivable | 42,071 | 33,904 | ||||
Merchandise inventory | 1,070,376 | 959,792 | ||||
Prepaid expenses and other | 70,396 | 50,567 | ||||
Deferred income taxes | 30,942 | 20,014 | ||||
Total current assets | 1,377,856 | 1,131,045 | ||||
Property and equipment, net | 790,298 | 733,905 | ||||
Other long-term assets | 68,249 | 58,057 | ||||
Long-term investments | 32,476 | 13,140 | ||||
Total assets | $ | 2,268,879 | $ | 1,936,147 | ||
Liabilities and stockholders' Equity | ||||||
Current Liabilities | ||||||
Accounts payable, accrued expenses and other | $ | 930,789 | $ | 860,591 | ||
Total current liabilities | 930,789 | 860,591 | ||||
Long-term debt | 150,000 |
- | ||||
Other long-term liabilities | 169,045 | 123,760 | ||||
Deferred income taxes | 81,997 | 94,747 | ||||
Commitments and contingencies | ||||||
Stockholders' Equity | 937,048 | 857,049 | ||||
Total liabilities and stockholders' equity | $ | 2,268,879 | $ | 1,936,147 | ||
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Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Six Months Ended | ||||||||
August 4, | July 29, | |||||||
($000, unaudited) | 2007 | 2006 | ||||||
Cash Flows From Operating Activities | ||||||||
Net earnings | $ | 117,907 | $ | 104,594 | ||||
Adjustments to reconcile net earnings to net cash from | ||||||||
operating activities: | ||||||||
Depreciation and amortization | 58,006 | 50,915 | ||||||
Stock-based compensation | 13,049 | 13,621 | ||||||
Deferred income taxes | (18,905 | ) | (3,092 | ) | ||||
Tax benefit from equity issuance | 5,505 | 6,280 | ||||||
Excess tax benefits from stock-based compensation | (4,533 | ) | (1,243 | ) | ||||
Change in assets and liabilities: | ||||||||
Merchandise inventory | (18,647 | ) | (21,701 | ) | ||||
Other current assets, net | (38,117 | ) | (18,259 | ) | ||||
Accounts payable | (88,665 | ) | 71,954 | |||||
Other current liabilities | (46,917 | ) | (36,743 | ) | ||||
Other, net | 28,965 | 2,770 | ||||||
Net cash provided by operating activities | 7,648 | 169,096 | ||||||
Cash Flows Used in Investing Activities | ||||||||
Purchase of assets under lease | - | (87,329 | ) | |||||
Additions to property and equipment | (107,285 | ) | (58,794 | ) | ||||
Purchases of investments | (46,918 | ) | (47,550 | ) | ||||
Proceeds from investments | 19,618 | 50,765 | ||||||
Net cash used in investing activities | (134,585 | ) | (142,908 | ) | ||||
Cash Flows Used in Financing Activities | ||||||||
Payment of term debt | - | (50,000 | ) | |||||
Issuance of common stock related to stock plans | 11,861 | 8,550 | ||||||
Excess tax benefits from stock-based compensation | 4,533 | 1,243 | ||||||
Treasury stock purchased | (2,919 | ) | (2,352 | ) | ||||
Repurchase of common stock | (100,578 | ) | (98,867 | ) | ||||
Dividends paid | (20,540 | ) | (17,178 | ) | ||||
Net cash used in financing activities | (107,643 | ) | (158,604 | ) | ||||
Net decrease in cash and cash equivalents | (234,580 | ) | (132,416 | ) | ||||
Cash and cash equivalents: | ||||||||
Beginning of period | 367,388 | 191,767 | ||||||
End of period | $ | 132,808 | $ | 59,351 | ||||
Supplemental Cash Flow Disclosures | ||||||||
Interest paid | $ | 4,834 | $ | 759 | ||||
Income taxes paid | $ | 119,628 | $ | 102,642 | ||||
Non-Cash Investing Activities | ||||||||
Change in fair value of investment securities | $ | 55 | $ | (192 | ) | |||
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