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):
November 19,
2009
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)
Registrant’s 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 November 19, 2009, the Company issued a press release regarding the Company’s financial results for its fiscal quarter ended October 31, 2009. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
| Exhibit | |||
| No. | Description | ||
| 99.1 | November 19, 2009 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: November 19, 2009
| ROSS STORES, INC. | |
| Registrant | |
| By: | /s/J. Call |
| John G. Call | |
| Senior Vice President, Chief Financial Officer and | |
| Principal Accounting Officer | |
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Exhibit 99.1
 |
FOR IMMEDIATE RELEASE
| Contact: | John G. Call | Bobbi Chaville |
| Senior Vice President, | Senior Director, Investor Relations | |
| Chief Financial Officer | (925) 965-4289 | |
| (925) 965-4315 | Email: bobbi.chaville@ros.com |
ROSS STORES REPORTS RECORD THIRD
QUARTER EARNINGS;
REAFFIRMS FOURTH QUARTER 2009 GUIDANCE
Pleasanton, California, November 19, 2009 -- Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 13 weeks ended October 31, 2009 increased 91% to $.84, from $.44 for the 13 weeks ended November 1, 2008. Net earnings for the third quarter ended October 31, 2009 grew 83% to a record $105.1 million, up from $57.3 million for the third quarter ended November 1, 2008. Fiscal 2009 third quarter sales increased 12% to $1.744 billion, with comparable store sales up a strong 8% over last year.
For the nine months ended October 31, 2009, earnings per share increased 52% to $2.39, from $1.57 for the nine months ended November 1, 2008. Net earnings for the year-to-date period in 2009 grew 44% to a record $299.9 million, up from $208.1 million in the prior year period. Sales for the first nine months of 2009 increased 10% to $5.204 billion, with comparable store sales up 5% on top of a 3% gain in the prior year period.
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, “We are very pleased with our robust sales and earnings growth in the third quarter and first nine months, both of which were well ahead of plan. Our ability to deliver compelling bargains, while operating our business on much lower inventories, remains the primary driver of these outstanding results. In addition, shortage results from our annual physical inventory during the quarter were much better than expected, mainly due to the ongoing successful implementation of our shortage control initiatives. Shoes and Dresses continued to be the top merchandise categories while the Southeast and Mid-Atlantic remained the strongest regions.”
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Mr. Balmuth continued, “Third quarter operating margin grew about 385 basis points to 9.9%, due to 340 basis points of higher gross margin and a 45 basis point decline in selling, general and administrative costs. The gross margin improvement was from a combination of healthy merchandise gross margin gains, much lower than expected shortage results, a decline in freight and distribution expenses as a percent of sales, and leverage on occupancy costs.”
Mr. Balmuth also noted, “As we ended the third quarter, our balance sheet and cash flows remained healthy. We continued to return capital to stockholders through our stock repurchase and dividend programs. During the first nine months of fiscal 2009, we repurchased 5.8 million shares of common stock for an aggregate purchase price of $230 million. We are on track to complete the remaining $70 million stock repurchase authorization by the end of fiscal 2009.”
Looking ahead, Mr. Balmuth said, “As we enter the important holiday season, we remain well positioned as a value retailer, and our stores are stocked with fresh and exciting assortments of terrific name-brand bargains. That said, with a still uncertain economic climate, we believe it is prudent to maintain our prior forecast for both sales and earnings.”
“For the 13 weeks ending January 30, 2010, we continue to forecast same store sales gains of 5% to 6% and earnings per share in the range of $.88 to $.94. For the fiscal year ending January 30, 2010, we now project earnings per share to increase 40% to 43% to $3.27 to $3.33, up from $2.33 in fiscal 2008,” concluded Mr. Balmuth.
The Company will provide additional details concerning its third quarter results, fourth quarter and fiscal 2009 guidance, and business outlook on a conference call to be held on Thursday, November 19, 2009 at 11:00 a.m. Eastern time. Participants may listen to a real time audio webcast of the conference call by visiting the Investors section of the Company’s website, located at www.rossstores.com. A recorded version of the call will be available at the website address and via a telephone recording until 8:00 p.m. Eastern time on November 26, 2009 at (706) 645-9291, PIN # 86370218.
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Forward-Looking Statements: This press release and the recorded comments and transcript on our corporate website contain forward-looking statements regarding expected sales and earnings levels in future periods that are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “target,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without limitation, competitive pressures in the apparel or home-related merchandise industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise, including the potential impact from uncertainty in financial and credit markets and the severity and duration of the current recession; 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 attract and retain personnel with the retail talent necessary to execute our strategies; our ability to effectively operate our various supply chain, core merchandising and other information systems; our ability to improve our merchandising capabilities through the development and implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in our distribution centers; and obtaining acceptable new store locations. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2008 and Form 10-Qs and 8-Ks for fiscal 2009. 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 nation’s second largest off-price retailer with fiscal 2008 revenues of $6.5 billion. As of October 31, 2009 the Company operated 955 Ross Dress for Less® (“Ross”) stores and 53 dd’s DISCOUNTS® locations, compared to 906 Ross and 57 dd’s 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. dd’s 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 at www.rossstores.com.
* * * * *
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Ross Stores,
Inc.
Condensed Consolidated Statements
of Earnings
| Three Months Ended | Nine Months Ended | |||||||||||
| October 31, | November 1, | October 31, | November 1, | |||||||||
| ($000, except stores and per share data, unaudited) | 2009 | 2008 | 2009 | 2008 | ||||||||
| Sales | $ | 1,744,139 | $ | 1,555,287 | $ | 5,204,374 | $ | 4,752,027 | ||||
| Costs and expenses | ||||||||||||
| Costs of goods sold | 1,284,852 | 1,198,451 | 3,864,697 | 3,635,230 | ||||||||
| Selling, general and administrative | 286,511 | 262,534 | 844,699 | 779,045 | ||||||||
| Interest expense (income), net | 1,943 | (15) | 4,989 | (2,688) | ||||||||
| Total costs and expenses | 1,573,306 | 1,460,970 | 4,714,385 | 4,411,587 | ||||||||
| Earnings before taxes | 170,833 | 94,317 | 489,989 | 340,440 | ||||||||
| Provision for taxes on earnings | 65,753 | 37,047 | 190,115 | 132,386 | ||||||||
| Net earnings | $ | 105,080 | $ | 57,270 | $ | 299,874 | $ | 208,054 | ||||
| Earnings per share | ||||||||||||
| Basic | $ | 0.86 | $ | 0.44 | $ | 2.43 | $ | 1.60 | ||||
| Diluted | $ | 0.84 | $ | 0.44 | $ | 2.39 | $ | 1.57 | ||||
| Weighted average shares outstanding (000) | ||||||||||||
| Basic | 122,377 | 128,930 | 123,512 | 130,119 | ||||||||
| Diluted | 124,648 | 131,099 | 125,592 | 132,324 | ||||||||
| Dividends per share | ||||||||||||
| Cash dividends declared per share | $ | 0.110 | $ | 0.095 | $ | 0.220 | $ | 0.190 | ||||
| Stores open at end of period | 1,008 | 963 | 1,008 | 963 | ||||||||
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Ross Stores,
Inc.
Condensed Consolidated Balance
Sheets
| October 31, | November 1, | |||||
| ($000, unaudited) | 2009 | 2008 | ||||
| Assets | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 576,162 | $ | 231,241 | ||
| Short-term investments | 979 | 2,833 | ||||
| Accounts receivable | 47,496 | 47,104 | ||||
| Merchandise inventory | 1,014,638 | 1,093,082 | ||||
| Prepaid expenses and other | 63,048 | 62,591 | ||||
| Deferred income taxes | 11,737 | 19,805 | ||||
| Total current assets | 1,714,060 | 1,456,656 | ||||
| Property and equipment, net | 945,734 | 931,891 | ||||
| Long-term investments | 18,974 | 39,072 | ||||
| Other long-term assets | 62,702 | 55,020 | ||||
| Total assets | $ | 2,741,470 | $ | 2,482,639 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 767,771 | $ | 686,401 | ||
| Accrued expenses and other | 235,605 | 243,509 | ||||
| Accrued payroll and benefits | 193,221 | 168,845 | ||||
| Income taxes payable | 11,275 | - | ||||
| Total current liabilities | 1,207,872 | 1,098,755 | ||||
| Long-term debt | 150,000 | 150,000 | ||||
| Other long-term liabilities | 171,666 | 162,134 | ||||
| Deferred income taxes | 104,739 | 85,860 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ Equity | 1,107,193 | 985,890 | ||||
| Total liabilities and stockholders’ equity | $ | 2,741,470 | $ | 2,482,639 | ||
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Ross Stores,
Inc.
Condensed Consolidated Statements
of Cash Flows
| Nine Months Ended | ||||||
| October 31, | November 1, | |||||
| ($000, unaudited) | 2009 | 2008 | ||||
| Cash Flows From Operating Activities | ||||||
| Net earnings | $ | 299,874 | $ | 208,054 | ||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 115,188 | 100,919 | ||||
| Stock-based compensation | 19,232 | 17,156 | ||||
| Deferred income taxes | 9,838 | 6,795 | ||||
| Tax benefit from equity issuance | 7,773 | 8,105 | ||||
| Excess tax benefit from stock-based compensation | (6,184) | (5,850) | ||||
| Change in assets and liabilities: | ||||||
| Merchandise inventory | (133,580) | (67,787) | ||||
| Other current assets | (14,133) | (19,272) | ||||
| Accounts payable | 245,034 | 61,982 | ||||
| Other current liabilities | 36,564 | 48,646 | ||||
| Other long-term, net | 4,276 | 10,085 | ||||
| Net cash provided by operating activities | 583,882 | 368,833 | ||||
| Cash Flows From Investing Activities | ||||||
| Additions to property and equipment | (124,175) | (175,468) | ||||
| Proceeds from sales of property and equipment | 10 | 117 | ||||
| Purchases of investments | (2,904) | (32,942) | ||||
| Proceeds from investments | 23,223 | 33,833 | ||||
| Net cash used in investing activities | (103,846) | (174,460) | ||||
| Cash Flows From Financing Activities | ||||||
| Excess tax benefit from stock-based compensation | 6,184 | 5,850 | ||||
| Issuance of common stock related to stock plans | 45,392 | 45,599 | ||||
| Treasury stock purchased | (5,428) | (3,560) | ||||
| Repurchase of common stock | (229,817) | (231,404) | ||||
| Dividends paid | (41,560) | (37,197) | ||||
| Net cash used in financing activities | (225,229) | (220,712) | ||||
| Net increase (decrease) in cash and cash equivalents | 254,807 | (26,339) | ||||
| Cash and cash equivalents: | ||||||
| Beginning of period | 321,355 | 257,580 | ||||
| End of period | $ | 576,162 | $ | 231,241 | ||
| Supplemental Cash Flow Disclosures | ||||||
| Interest paid | $ | 4,834 | $ | 4,834 | ||
| Income taxes paid | $ | 166,382 | $ | 139,215 | ||
| Non-Cash Investing Activities | ||||||
| Increase (decrease) in fair value of investment securities | $ | 1,462 | $ | (4,069) | ||
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