Document


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 20, 2018

ROSS STORES, INC.
(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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






Item 2.02 Results of Operations and Financial Condition.
On November 20, 2018, the Company issued a press release regarding the Company’s financial results for its fiscal quarter ended November 3, 2018. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
The information furnished with this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits.
Exhibit
 No.

 
Description

99.1
 
 




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 20, 2018


ROSS STORES, INC.
Registrant


By: /s/Michael J. Hartshorn    
Michael Hartshorn
Executive Vice President, Chief Financial Officer
and Principal Accounting Officer



Exhibit
    

Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12561532&doc=3__________________________________________________________________


FOR IMMEDIATE RELEASE

Contact:
Michael Hartshorn
 
Connie Kao
 
 
Executive Vice President,
 
Vice President, Investor Relations
 
 
Chief Financial Officer
 
(925) 965-4668
 
 
(925) 965-4503
 
connie.kao@ros.com
 

ROSS STORES REPORTS THIRD QUARTER EARNINGS,
UPDATES FOURTH QUARTER GUIDANCE


Dublin, California, November 20, 2018 -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the third quarter ended November 3, 2018 of $.91, versus $.72 for the 13 weeks ended October 28, 2017. Net earnings grew to $338 million, up from $274 million in the prior year. Third quarter sales rose 7% to $3.5 billion, with comparable store sales up 3% over the 13 weeks ended November 4, 2017. This compares to last year’s same store sales gain of 4% for the 13 weeks ended October 28, 2017.

For the nine months ended November 3, 2018, earnings per share were $3.06, up from $2.36 last year. Net earnings were $1.1 billion, compared to $912 million in the prior year. Sales year-to-date rose 8% to $10.9 billion, with comparable store sales up 3% over the 39 weeks ended November 4, 2017. This is on top of a same store sales gain of 4% for the nine months ended October 28, 2017. Both the third quarter and year-to-date earnings results include the benefit of tax reform.

Barbara Rentler, Chief Executive Officer, commented, “Both sales and earnings for the quarter were ahead of our forecast, despite being up against very strong multi-year comparisons. Though above plan, operating margin of 12.4% was down from last year as higher merchandise margin was more than offset by increases in freight costs and this year’s wage investments.”

Ms. Rentler continued, “During the third quarter and first nine months of fiscal 2018, we repurchased 2.9 million and 9.4 million shares of common stock, respectively, for an aggregate price of $278 million in the quarter and $807 million year-to-date. We remain on track to buy back a total of $1.075 billion in common stock during fiscal 2018.”







Looking ahead, Ms. Rentler said, “As we enter this year’s holiday season, not only are we up against our toughest sales comparisons from 2017, but we are also expecting another fiercely competitive retail environment. As a result, while we hope to do better, we continue to project fourth quarter comparable store sales gains of 1% to 2% versus a strong 5% increase last year. We are now forecasting our earnings per share for the 13 weeks ending February 2, 2019 to be in the range of $1.09 to $1.14, which includes a one-time, non-cash benefit of approximately $.07 per share related to the favorable resolution of a tax matter. This updated guidance compares to earnings per share for the 14 weeks ended February 3, 2018 of $1.19, which included a per share benefit of $.14 from a one-time revaluation of deferred taxes and $.10 from the 53rd week.”

Ms. Rentler continued, “Based on our year-to-date results and our updated fourth quarter guidance, we are now planning earnings per share for fiscal 2018 to be in the range of $4.15 to $4.20.”

The Company will host a conference call on Tuesday, November 20, 2018, at 12:00 p.m. Eastern time to provide additional details concerning its third quarter results and management’s outlook for the remainder of the year. 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 #8886637 until 8:00 p.m. Eastern time on November 27, 2018, as well as on the Company’s website.


Forward-Looking Statements:  This press release contains forward-looking statements regarding expected sales, earnings levels, new store growth opportunity, 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,” “outlook,” “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 and home-related merchandise; market availability, quantity, and quality of attractive brand name merchandise at desirable discounts and our buyers’ ability to purchase merchandise that enables us to offer customers a wide assortment of merchandise at competitive prices; impacts from the macro-economic environment, financial and credit markets, and geopolitical conditions that affect consumer confidence and consumer disposable income; our ability to continually attract, train, and retain associates to execute our off-price strategies; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores; potential information or data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could result in theft or unauthorized disclosure of customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business; potential disruptions in our supply chain or information systems; issues involving the quality, safety, or authenticity of products we sell, which could harm our reputation, result in lost sales, and/or increase our costs; our ability to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margin; changes in U.S. tax or tariff policy regarding apparel and home-related merchandise produced in other countries that could adversely affect our business; volatility in revenues and earnings; an adverse outcome in various legal, regulatory, or tax matters; a natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center; unexpected issues or costs from expanding in existing markets and entering new geographic markets; obtaining acceptable new store sites with favorable consumer demographics; damage to our corporate reputation or brands; effectively advertising and marketing our brands; issues from selling and importing merchandise produced in other countries; and maintaining sufficient liquidity to support our





continuing operations, new store and distribution center growth plans, and stock repurchase and dividend programs. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2017, and Form 10-Qs and Form 8-Ks for fiscal 2018. 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. is an S&P 500, Fortune 500 and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2017 revenues of $14.1 billion. The Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,483 locations in 38 states, the District of Columbia and Guam as of November 3, 2018. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operates 237 dd’s DISCOUNTS® in 18 states as of November 3, 2018 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 savings of 20% to 70% off moderate department and discount store regular prices every day. Additional information is available at www.rossstores.com.

* * * * *








Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
($000, except stores and per share data, unaudited)
 
 
November 3, 2018

 
October 28, 2017

 
November 3, 2018

 
October 28, 2017

 
 
 
 
 
 
 
 
 
 
 
 
Sales
 
 
$
3,549,608

 
$
3,328,894

 
$
10,876,153

 
$
10,066,926

 
 
 
 
 
 
 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
 
 
 
 
 
Cost of goods sold
 
 
2,547,331

 
2,369,148

 
7,736,533

 
7,120,056

 
Selling, general and administrative
 
 
561,577

 
517,297

 
1,640,581

 
1,490,392

 
Interest (income) expense, net
 
 
(2,953
)
 
1,780

 
(4,849
)
 
7,290

 
 
Total costs and expenses
 
 
3,105,955

 
2,888,225

 
9,372,265

 
8,617,738

 
 
 
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
 
443,653

 
440,669

 
1,503,888

 
1,449,188

Provision for taxes on earnings
 
 
105,545

 
166,220

 
358,124

 
537,182

Net earnings
 
 
$
338,108

 
$
274,449

 
$
1,145,764

 
$
912,006

 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
 
 
Basic
 
 
$
0.92

 
$
0.72

 
$
3.09

 
$
2.38

 
Diluted
 
 
$
0.91

 
$
0.72

 
$
3.06

 
$
2.36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding (000)
 
 
 
 
 
 
 
 
 
 
Basic
 
 
368,102

 
379,432

 
370,977

 
382,959

 
Diluted
 
 
371,061

 
382,132

 
373,936

 
385,823

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stores open at end of period
 
 
1,720

 
1,627

 
1,720

 
1,627

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 






Ross Stores, Inc.
Condensed Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($000, unaudited)
 
November 3, 2018

 
October 28, 2017

Assets
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
Cash and cash equivalents
 
$
1,349,196

 
$
1,144,169

 
Short-term investments
 

 
518

 
Accounts receivable
 
117,825

 
103,071

 
Merchandise inventory
 
1,979,080

 
1,840,225

 
Prepaid expenses and other
 
177,206

 
147,962

 
 
Total current assets
 
3,623,307

 
3,235,945

 
 
 
 
 
 
 
Property and equipment, net
 
2,418,226

 
2,348,186

Long-term investments
 
475

 
715

Other long-term assets
 
193,759

 
182,132

Total assets
 
$
6,235,767

 
$
5,766,978

 
 
 
 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
Accounts payable
 
$
1,394,029

 
$
1,289,620

 
Accrued expenses and other
 
455,743

 
445,728

 
Accrued payroll and benefits
 
317,525

 
320,894

 
Current portion of long-term debt
 
84,997

 

 
 
Total current liabilities
 
2,252,294

 
2,056,242

 
 
 
 
 
 
 
Long-term debt
 
312,328

 
396,848

Other long-term liabilities
 
371,844

 
325,587

Deferred income taxes
 
112,138

 
129,782

 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders’ Equity
 
3,187,163

 
2,858,519

Total liabilities and stockholders’ equity
 
$
6,235,767

 
$
5,766,978

 
 
 
 
 
 
 






Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
($000, unaudited)
 
November 3, 2018

 
October 28, 2017 1

 
 
 
 
 
 
 
Cash Flows From Operating Activities
 
 
 
 
Net earnings
 
$
1,145,764

 
$
912,006

Adjustments to reconcile net earnings to net cash
 
 
 
 
provided by operating activities:
 
 
 
 
 
Depreciation and amortization
 
246,151

 
227,255

 
Stock-based compensation
 
71,361

 
64,937

 
Deferred income taxes
 
19,607

 
9,074

 
Change in assets and liabilities:
 
 
 
 
 
 
Merchandise inventory
 
(337,345
)
 
(327,339
)
 
 
Other current assets
 
(76,489
)
 
(62,610
)
 
 
Accounts payable
 
328,062

 
271,526

 
 
Other current liabilities
 
35,758

 
51,567

 
 
Other long-term, net
 
17,203

 
19,270

 
 
Net cash provided by operating activities
 
1,450,072

 
1,165,686

 
 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
Additions to property and equipment
 
(293,366
)
 
(266,863
)
Proceeds from investments
 
739

 

 
 
Net cash used in investing activities
 
(292,627
)
 
(266,863
)
 
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
Issuance of common stock related to stock plans
 
14,915

 
13,668

Treasury stock purchased
 
(53,680
)
 
(45,440
)
Repurchase of common stock
 
(806,500
)
 
(648,835
)
Dividends paid
 
(253,863
)
 
(186,459
)
 
 
Net cash used in financing activities
 
(1,099,128
)
 
(867,066
)
 
 
 
 
 
 
 
Net increase in cash, cash equivalents, and restricted cash and cash equivalents
 
58,317

 
31,757

 
 
 
 
 
 
 
Cash, cash equivalents, and restricted cash and cash equivalents:
 
 
 
 
 
 
Beginning of period1
 
1,353,272

 
1,176,180

 
 
End of period
 
$
1,411,589

 
$
1,207,937

 
 
 
 
 
 
 
Reconciliations:
 
 
 
 
Cash and cash equivalents
 
$
1,349,196

 
$
1,144,169

Restricted cash and cash equivalents included in prepaid expenses and other
 
8,933

 
12,776

Restricted cash and cash equivalents included in other long-term assets
 
53,460

 
50,992

Total cash, cash equivalents, and restricted cash and cash equivalents:

 
$
1,411,589

 
$
1,207,937

 
 
 
 
 
Supplemental Cash Flow Disclosures
 
 
 
 
Interest paid
 
$
13,271

 
$
13,271

Income taxes paid
 
$
343,848

 
$
552,720

 
 
 
 
 
 
 
1 As the result of the adoption of ASU 2016-18, Statement of Cash Flow (Topic 230): Restricted Cash, the prior year amounts were retrospectively adjusted to include restricted cash and cash equivalents.