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): | ||
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||||||||||||
(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):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | |||||||||||||||
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 ☐
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. ☐
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On March 17, 2020, Ross Stores, Inc. (the “Company”) committed to borrow $800 million in principal amount under its existing $800 million unsecured revolving credit facility. The credit facility used for this borrowing is the Amended and Restated Credit Agreement (the “Credit Facility”), entered into as of July 1, 2019 among the Company, the lenders from time to time party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, Wells Fargo Bank, National Association as an L/C Issuer, and JPMorgan Chase Bank, N.A. as an L/C Issuer.
The Company elected to execute this borrowing as a Eurodollar Rate loan (LIBOR). The interest rate for the loan is 1.61175%, which is fixed at the start of the requested term. Interest is payable quarterly, upon any payment of principal, and upon maturity. The maximum initial term for this loan is one year. Payment due on the loan is subject to acceleration upon any event of default.
The Credit Facility is described in Note F of the Notes to Condensed Consolidated Financial Statements included in the Company’s most recent Quarterly Report on Form 10-Q, filed on December 11, 2019, which description is incorporated by reference herein. That description is also qualified by reference to the full text of the Credit Facility, which was filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on September 11, 2019.
Item 7.01 Regulation FD Disclosure.
On March 19, 2020, the Company issued a press release providing a business update related to COVID-19, including withdrawing the Company’s first quarter and 2020 full year sales and earnings guidance issued on March 3, 2020, temporarily suspending its stock repurchase program, and drawing down $800 million under its revolving credit facility. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
The information furnished with this Item 7.01, 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: March 19, 2020
| ROSS STORES, INC | |||||
| Registrant | |||||
By: /s/Ken Jew | |||||
| Ken Jew | |||||
| Group Senior Vice President, General Counsel and | |||||
| Corporate Secretary | |||||
Exhibit 99.1
_____________________________________________________________________FOR IMMEDIATE RELEASE
| Contact: | Travis Marquette | Connie Kao | ||||||||||||
| Group Senior Vice President, | Vice President, Investor Relations | |||||||||||||
| Chief Financial Officer | (925) 965-4668 | |||||||||||||
| (925) 965-4550 | connie.kao@ros.com | |||||||||||||
ROSS STORES ISSUES BUSINESS UPDATE RELATED TO COVID-19
Dublin, California, March 19, 2020 -- Ross Stores, Inc. (NASDAQ: ROST) provided a business update today in response to the impact of COVID-19 on the Company’s operations. While February sales were ahead of its expectations, the Company has experienced a broad-based deceleration in sales trends over the past week from the continued spread of the virus throughout the country and the mandatory closure of stores in certain markets. Further, additional store closures are expected.
As a result of this unprecedented period of uncertainty, including the unknown duration and overall impact on consumer demand, the Company is withdrawing its first quarter and 2020 full year sales and earnings guidance issued on March 3, 2020. To preserve financial liquidity, and out of an abundance of caution, management is also temporarily suspending the Company’s stock repurchase program and is drawing down $800 million under its revolving credit facility to add to its cash balances. In addition, the Company is currently reducing its capital expenditure and expense plans as well as aligning inventory positions with current sales trends in the business.
Barbara Rentler, Chief Executive Officer, commented, “I want to emphasize that our Company began 2020 in a strong financial position. We are proactively taking these early actions to further increase our liquidity and flexibility to successfully manage through these challenging times. We will continue to monitor ongoing developments and respond accordingly.”
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Forward-Looking Statements: This press release contains forward-looking statements regarding expected sales, earnings levels, new store growth, 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, the recent and ongoing uncertainties and potential business disruption from the COVID-19 outbreak; 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, geopolitical conditions, or public health issues (such as pandemics); 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, tariff, or trade 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 2018, and Form 10-Qs and Form 8-Ks for fiscal 2019. 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 2019 revenues of $16.0 billion. Currently, the Company operates Ross Dress for Less® ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,565 locations in 39 states, the District of Columbia, and Guam. 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 266 dd's DISCOUNTS® in 20 states 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.
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