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
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
February 26, 2015
ROSS STORES, INC.
(Exact name of registrant as specified in its charter)
(Exact name of registrant as specified in its charter)
Delaware | 0-14678 | 94-1390387 | ||
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||
5130 Hacienda Drive, Dublin, California 94568
(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. 5130 Hacienda Drive, Dublin, California 94568 (925) 965-4400
Item 2.02 Results of Operations and Financial Condition.
On February 26, 2015, the Company issued a press release regarding the Company’s financial results for its fiscal quarter and fiscal year ended January 31, 2015. 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 | February 26, 2015 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: February 26, 2015
ROSS STORES, INC.
Registrant
By: /s/Michael J. Hartshorn
Michael Hartshorn
Senior Vice President, Chief Financial Officer and
Principal Accounting Officer
Exhibit 99.1
______________________________________________________________________FOR IMMEDIATE RELEASE
Contact: | Michael Hartshorn | Connie Wong | ||
Senior Vice President, | Director, Investor Relations | |||
Chief Financial Officer | (925) 965-4668 | |||
(925) 965-4503 | connie.wong@ros.com | |||
ROSS STORES REPORTS FOURTH QUARTER
AND FISCAL 2014 RESULTS
ANNOUNCES NEW $1.4 BILLION STOCK REPURCHASE PROGRAM,
18% INCREASE IN QUARTERLY CASH DIVIDEND,
AND PROVIDES FIRST QUARTER AND FISCAL 2015 GUIDANCE
Dublin, California, February 26, 2015 -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share of $1.20 for the fourth quarter ended January 31, 2015, up 18% from $1.02 in the prior year. Net earnings grew to $249 million, up from $218 million for the same period last year. Sales for the fiscal 2014 fourth quarter rose 11% to $3.033 billion, with comparable store sales up 6% over the prior year.
For the fiscal year ended January 31, 2015, earnings per share were $4.42, up 14% from $3.88 for fiscal 2013. Net earnings rose to $925 million, compared to $837 million in the prior year. Sales for the 2014 fiscal year grew 8% to $11.042 billion, with same store sales up 3% over fiscal 2013.
Barbara Rentler, Chief Executive Officer, commented, “We are pleased with our fourth quarter sales and earnings, both of which were well ahead of our expectations, as our value offering on a wide assortment of name brand bargains and gifts resonated well with our customers. Our 2014 fourth quarter operating margin grew 45 basis points to 13.1%, benefiting from slightly higher merchandise gross margin and leverage on expenses from our robust comparable sales gain.”
Ms. Rentler continued, “For the 2014 fiscal year, our earnings per share rose a solid 14% on top of strong multi-year increases. In addition, our fiscal 2014 operating margin increased 35 basis points to 13.5%.”
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New Two-Year $1.4 Billion Stock Repurchase Program and 18% Increase in Cash Dividend
The Company announced that its Board of Directors recently approved a program to repurchase $1.4 billion of its common stock over the next two years through fiscal 2016. At recent stock prices, this new authorization represents about 7% of the Company’s total market value and a 27% increase over the prior two-year $1.1 billion authorization that was completed in January 2015.
The Board also recently approved an increase in the quarterly cash dividend to $.235 per share, up 18% on top of an 18% increase in the prior year. This higher quarterly dividend is payable on March 31, 2015 to stockholders of record as of March 9, 2015.
In commenting on these actions, Ms. Rentler said, “Our larger two-year $1.4 billion stock repurchase authorization and increase in the quarterly cash dividend demonstrate our ongoing confidence in the Company’s ability to generate significant amounts of cash after funding our growth and the other capital needs of our business. We have repurchased stock as planned every year since 1993 and also raised our cash dividend annually since 1994. This consistent record reflects our unwavering commitment to enhancing stockholder value and returns.”
A total of 7.4 million shares of common stock were repurchased during fiscal 2014, for an aggregate purchase price of $550 million. During the fourth quarter, the Company repurchased 1.5 million shares for a total price of $132 million.
Fiscal 2015 Guidance
Looking ahead, Ms. Rentler said, “As we enter 2015, we continue to face ongoing uncertainty and volatility in the macro-economic and retail climates. While we hope to do better, based on these external factors and our own challenging multi-year sales and earnings comparisons, we are remaining somewhat cautious in our outlook.”
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For the fiscal 2015 year ending January 30, 2016, the Company is forecasting same store sales to grow 1% to 2% and earnings per share of $4.60 to $4.80, up from $4.42 in fiscal 2014. For the first quarter ending May 2, 2015, comparable store sales are projected to increase 2% to 3% with earnings per share forecast in the range of $1.21 to $1.26, up from $1.15 for the same period last year.
The Company will host a conference call on Thursday, February 26, 2015 at 4:15 p.m. Eastern time to provide additional details concerning its fourth quarter and fiscal year 2014 results and management’s outlook and plans for fiscal 2015. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at www.rossstores.com. An audio playback will be available at 404-537-3406, PIN #81791641 until 8:00 p.m. Eastern time on March 5, 2015, as well as on the Company’s website.
Forward-Looking Statements: This press release on our corporate website contains forward-looking statements regarding expected sales, earnings levels and other financial results 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 retailing industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise; impacts from the macro-economic environment and financial and credit markets that affect consumer disposable income and consumer confidence, including but not limited to interest rates, recession, inflation, deflation, energy costs, tax rates and policy, unemployment trends, and fluctuating commodity costs; changes in geopolitical and geoeconomic conditions; unseasonable weather trends; potential disruptions in supply chain or information systems; 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; attracting and retaining personnel with the retail talent necessary to execute our strategies; effectively operating and continually upgrading our various supply chain, core merchandising and other information systems; improving our merchandising and transaction processing capabilities and the reliability and security of our data communications systems through the implementation of new processes and systems enhancements; effectively protecting against security breaches, including cyber-attacks on our transaction processing and computer information systems, that could result in the theft, transfer or unauthorized disclosure of customer, credit card, employee or other private and valuable information that we collect and process in the ordinary course of our business, and avoiding resulting damage to our reputation, loss of customer confidence, exposure to litigation and regulatory action, unanticipated costs and disruption of our operations; obtaining acceptable new store locations and improving new store sales and profitability, especially in newer regions and markets; adding capacity to our existing distribution centers and building out planned additional distribution centers timely and cost effectively; and achieving and maintaining targeted levels of productivity and efficiency in our existing and new distribution centers. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2013, Form 10-Qs for fiscal 2014 and 8-Ks for fiscal 2014 and 2015. 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.
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Ross Stores, Inc. is an S&P 500, Fortune 500 and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2014 revenues of $11.0 billion. The Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,210 locations in 33 states, the District of Columbia and Guam at fiscal 2014 year end. 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% off department and specialty store regular prices. The Company also operates 152 dd’s DISCOUNTS® in 15 states at the end of fiscal 2014 that feature 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% 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 | Twelve Months Ended | ||||||||||||||||||
January 31, | February 1, | January 31, | February 1, | ||||||||||||||||
($000, except stores and per share data, unaudited) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
Sales | $ | 3,032,698 | $ | 2,741,040 | $ | 11,041,677 | $ | 10,230,353 | |||||||||||
Costs and Expenses | |||||||||||||||||||
Cost of goods sold | 2,203,570 | 1,992,101 | 7,937,956 | 7,360,924 | |||||||||||||||
Selling, general and administrative | 430,342 | 401,345 | 1,615,371 | 1,526,366 | |||||||||||||||
Interest expense (income), net | 2,406 | (129 | ) | 2,984 | (247 | ) | |||||||||||||
Total costs and expenses | 2,636,318 | 2,393,317 | 9,556,311 | 8,887,043 | |||||||||||||||
Earnings before taxes | 396,380 | 347,723 | 1,485,366 | 1,343,310 | |||||||||||||||
Provision for taxes on earnings | 147,850 | 129,770 | 560,642 | 506,006 | |||||||||||||||
Net earnings | $ | 248,530 | $ | 217,953 | $ | 924,724 | $ | 837,304 | |||||||||||
Earnings per share | |||||||||||||||||||
Basic | $ | 1.21 | $ | 1.04 | $ | 4.47 | $ | 3.93 | |||||||||||
Diluted | $ | 1.20 | $ | 1.02 | $ | 4.42 | $ | 3.88 | |||||||||||
Weighted average shares outstanding (000) | |||||||||||||||||||
Basic | 204,557 | 210,293 | 206,777 | 212,881 | |||||||||||||||
Diluted | 206,731 | 213,181 | 209,039 | 215,805 | |||||||||||||||
Dividends | |||||||||||||||||||
Cash dividends declared per share | $ | 0.20 | $ | 0.17 | $ | 0.80 | $ | 0.51 | |||||||||||
Stores open at end of period | 1,362 | 1,276 | 1,362 | 1,276 | |||||||||||||||
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Ross Stores, Inc. | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
($000, unaudited) | January 31, 2015 | February 1, 2014 | ||||||||
Assets | ||||||||||
Current Assets | ||||||||||
Cash and cash equivalents | $ | 696,608 | $ | 423,168 | ||||||
Short-term investments | 500 | 12,006 | ||||||||
Accounts receivable | 73,278 | 62,612 | ||||||||
Merchandise inventory | 1,372,675 | 1,257,155 | ||||||||
Prepaid expenses and other | 106,778 | 101,991 | ||||||||
Deferred income taxes | 12,951 | 10,227 | ||||||||
Total current assets | 2,262,790 | 1,867,159 | ||||||||
Property and equipment, net | 2,273,752 | 1,875,299 | ||||||||
Long-term investments | 3,110 | 3,710 | ||||||||
Other long-term assets | 163,482 | 150,629 | ||||||||
Total assets | $ | 4,703,134 | $ | 3,896,797 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Current Liabilities | ||||||||||
Accounts payable | $ | 1,000,700 | $ | 779,455 | ||||||
Accrued expenses and other | 385,325 | 359,929 | ||||||||
Accrued payroll and benefits | 256,141 | 235,324 | ||||||||
Income taxes payable | 17,202 | 18,349 | ||||||||
Total current liabilities | 1,659,368 | 1,393,057 | ||||||||
Long-term debt | 398,375 | 150,000 | ||||||||
Other long-term liabilities | 279,500 | 287,567 | ||||||||
Deferred income taxes | 86,681 | 58,871 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders’ Equity | 2,279,210 | 2,007,302 | ||||||||
Total liabilities and stockholders’ equity | $ | 4,703,134 | $ | 3,896,797 | ||||||
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Ross Stores, Inc. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
Twelve Months Ended | ||||||||||
($000, unaudited) | January 31, 2015 | February 1, 2014 | ||||||||
Cash Flows From Operating Activities | ||||||||||
Net earnings | $ | 924,724 | $ | 837,304 | ||||||
Adjustments to reconcile net earnings to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation and amortization | 232,959 | 206,111 | ||||||||
Stock-based compensation | 53,001 | 46,847 | ||||||||
Deferred income taxes | 25,086 | (15,250 | ) | |||||||
Tax benefit from equity issuance | 29,759 | 27,661 | ||||||||
Excess tax benefit from stock-based compensation | (29,415 | ) | (26,906 | ) | ||||||
Change in assets and liabilities: | ||||||||||
Merchandise inventory | (115,520 | ) | (47,918 | ) | ||||||
Other current assets | (16,410 | ) | (9,875 | ) | ||||||
Accounts payable | 204,158 | (4,104 | ) | |||||||
Other current liabilities | 69,568 | (18,562 | ) | |||||||
Other long-term, net | (5,045 | ) | 26,695 | |||||||
Net cash provided by operating activities | 1,372,865 | 1,022,003 | ||||||||
Cash Flows From Investing Activities | ||||||||||
Additions to property and equipment | (646,691 | ) | (550,515 | ) | ||||||
Increase in restricted cash and investments | (4,329 | ) | (2,895 | ) | ||||||
Purchases of investments | — | (12,012 | ) | |||||||
Proceeds from investments | 12,021 | 1,614 | ||||||||
Net cash used in investing activities | (638,999 | ) | (563,808 | ) | ||||||
Cash Flows From Financing Activities | ||||||||||
Excess tax benefit from stock-based compensation | 29,415 | 26,906 | ||||||||
Proceeds from issuance of long-term debt | 245,676 | — | ||||||||
Issuance of common stock related to stock plans | 21,978 | 19,074 | ||||||||
Treasury stock purchased | (39,041 | ) | (29,851 | ) | ||||||
Repurchase of common stock | (550,000 | ) | (550,000 | ) | ||||||
Dividends paid | (168,454 | ) | (147,917 | ) | ||||||
Net cash used in financing activities | (460,426 | ) | (681,788 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 273,440 | (223,593 | ) | |||||||
Cash and cash equivalents: | ||||||||||
Beginning of period | 423,168 | 646,761 | ||||||||
End of period | $ | 696,608 | $ | 423,168 | ||||||
Supplemental Cash Flow Disclosures | ||||||||||
Interest paid | $ | 9,668 | $ | 9,668 | ||||||
Income taxes paid | $ | 510,145 | $ | 506,182 | ||||||
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