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 2.02 Results of Operations and Financial Condition.
On November 18, 2021, the Company issued a press release regarding the Company’s financial results for its fiscal quarter ended October 30, 2021. 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 | ||||||||
| 104 | Cover Page Interactive Data File. (The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.) | |||||||
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 18, 2021
| ROSS STORES, INC. | ||||||||
| Registrant | ||||||||
| By: | /s/Adam Orvos | |||||||
| Adam Orvos | ||||||||
| Executive Vice President and Chief Financial | ||||||||
| Officer, and Principal Accounting Officer | ||||||||
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Exhibit 99.1
__________________________________________________________________FOR IMMEDIATE RELEASE
| Contact: | Adam Orvos | Connie Kao | ||||||||||||
| Executive Vice President, | Group Vice President, Investor Relations | |||||||||||||
| Chief Financial Officer | (925) 965-4668 | |||||||||||||
| (925) 965-4550 | connie.kao@ros.com | |||||||||||||
ROSS STORES REPORTS THIRD QUARTER RESULTS,
PROVIDES FOURTH QUARTER GUIDANCE
Dublin, California, November 18, 2021 -- Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per share for the third quarter ended October 30, 2021 of $1.09 on net income of $385 million. This compares to $1.03 per share on net earnings of $371 million for the 13 weeks ended November 2, 2019. Sales rose 19% to $4.6 billion, with comparable store sales up a strong 14%.
For the nine months ended October 30, 2021, earnings per share were $3.82 on net earnings of $1.4 billion, up from $3.32 per share on net income of $1.2 billion for the same period in 2019. Sales year-to-date rose 20% to $13.9 billion, with comparable store sales up 14%.
Barbara Rentler, Chief Executive Officer, commented, “Third quarter sales and profitability significantly exceeded our expectations as consumers continued to respond favorably to our broad assortment of great bargains. We achieved these results despite waning government stimulus and uncertainty related to the spread of COVID variants. Operating margin of 11.4% was better than plan, though down from 2019 as leverage from the robust sales gains was partially offset by ongoing headwinds from higher freight, wage, and COVID-related costs.”
Ms. Rentler continued, “During the third quarter and first nine months of fiscal 2021, we repurchased 2.1 million and 3.5 million shares of common stock, respectively, for an aggregate cost of $241 million in the quarter and $417 million year-to-date. We remain on track to buy back a total of $650 million in common stock during fiscal 2021.”
ROSS STORES, INC. 5130 Hacienda Drive, Dublin, CA 94568 (925) 965-4400
Looking ahead, Ms. Rentler said, “While we are encouraged by the ongoing strength of consumer demand, there remains significant uncertainty related to the worsening industry-wide supply chain congestion as we enter the important holiday season. As a result, and while we hope to do better, we are projecting fourth quarter comparable store sales gains of 7% to 9% and earnings per share in the range of $0.83 to $0.93.”
Ms. Rentler added, “Based on our year-to-date results and our updated fourth quarter guidance, we are now planning earnings per share for fiscal 2021 to be in the range of $4.65 to $4.75 on a comparable store sales gain of 12% to 13%.”
Ms. Rentler concluded, “Moving forward, consumers’ increasing focus on value and convenience along with the large number of recent retail closures and bankruptcies make us confident about our prospects for continued market share gains in the future.”
The Company will host a conference call on Thursday, November 18, 2021, at 4:15 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 #9489421 until 8:00 p.m. Eastern time on November 26, 2021, as well as on the Company’s website.
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Forward-Looking Statements: This press release and the related conference call remarks contains forward-looking statements regarding projected sales and earnings, planned new store growth, and other financial results and market conditions 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 uncertainties and potential for the recurrence of significant business disruptions arising from the COVID-19 pandemic; changes in the level of consumer spending on or preferences for apparel and home-related merchandise; impacts from the macro-economic environment, financial and credit markets, geopolitical conditions, unemployment levels or public health issues (such as pandemics) that affect consumer confidence and consumer disposable income; our need to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margins; competitive pressures in the apparel or home-related merchandise retailing industry; issues associated with importing and selling merchandise produced in other countries, including risks from supply chain disruptions due to port of exit/entry congestion, shipping delays and ocean freight cost increases, and risks from other supply chain related disruptions, including those due to COVID-19 closures; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and that may result in temporary store closures and disruptions in deliveries of merchandise to our stores; 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; potential 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; an adverse outcome in various legal, regulatory, or tax matters, or the adoption of new federal or state tax legislation that increases tax rates or adds new taxes, could increase our costs; damage to our corporate reputation or brands; our need to continually attract, train, and retain associates to execute our off-price strategies; our need to effectively advertise and market our business; 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 additional pandemic, 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; and maintaining sufficient liquidity to support our continuing operations, new store openings and reopenings, and ongoing capital expenditure plans. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2020, and fiscal 2021 Form 10-Qs and Form 8-Ks on file with the SEC. 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 2020 revenues of $12.5 billion. Currently, the Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,629 locations in 40 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 295 dd’s DISCOUNTS® stores in 21 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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| Ross Stores, Inc. | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
| ($000, except stores and per share data, unaudited) | October 30, 2021 | October 31, 2020 | November 2, 2019 | October 30, 2021 | October 31, 2020 | November 2, 2019 | ||||||||||||||||||||||||||||||||||||||
| Sales | $ | 4,574,541 | $ | 3,754,509 | $ | 3,849,117 | $ | 13,895,595 | $ | 8,281,894 | $ | 11,625,628 | ||||||||||||||||||||||||||||||||
| Costs and Expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold | 3,326,004 | 2,711,419 | 2,766,432 | 9,935,271 | 6,681,530 | 8,311,950 | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 725,761 | 877,857 | 604,605 | 2,118,602 | 1,812,657 | 1,754,825 | ||||||||||||||||||||||||||||||||||||||
| Interest expense (income), net | 18,744 | 28,740 | (4,402) | 56,500 | 64,261 | (14,819) | ||||||||||||||||||||||||||||||||||||||
| Total costs and expenses | 4,070,509 | 3,618,016 | 3,366,635 | 12,110,373 | 8,558,448 | 10,051,956 | ||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before taxes | 504,032 | 136,493 | 482,482 | 1,785,222 | (276,554) | 1,573,672 | ||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for taxes on earnings (loss) | 119,002 | 5,296 | 111,550 | 429,455 | (123,956) | 368,877 | ||||||||||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 385,030 | $ | 131,197 | $ | 370,932 | $ | 1,355,767 | $ | (152,598) | $ | 1,204,795 | ||||||||||||||||||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 1.10 | $ | 0.37 | $ | 1.04 | $ | 3.85 | $ | (0.43) | $ | 3.35 | ||||||||||||||||||||||||||||||||
| Diluted | $ | 1.09 | $ | 0.37 | $ | 1.03 | $ | 3.82 | $ | (0.43) | $ | 3.32 | ||||||||||||||||||||||||||||||||
| Weighted-average shares outstanding (000) | ||||||||||||||||||||||||||||||||||||||||||||
| Basic | 351,071 | 352,481 | 356,879 | 352,308 | 352,320 | 359,919 | ||||||||||||||||||||||||||||||||||||||
| Diluted | 353,081 | 354,457 | 359,299 | 354,477 | 352,320 | 362,455 | ||||||||||||||||||||||||||||||||||||||
| Store count at end of period | 1,924 | 1,869 | 1,810 | 1,924 | 1,869 | 1,810 | ||||||||||||||||||||||||||||||||||||||
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| Ross Stores, Inc. | ||||||||||||||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||||||||||||||||
| ($000, unaudited) | October 30, 2021 | October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Current Assets | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 5,259,595 | $ | 4,416,124 | $ | 1,142,709 | ||||||||||||||||||||
| Accounts receivable | 158,765 | 122,654 | 124,853 | |||||||||||||||||||||||
| Merchandise inventory | 2,231,242 | 1,630,390 | 2,168,796 | |||||||||||||||||||||||
| Prepaid expenses and other | 195,309 | 347,399 | 170,304 | |||||||||||||||||||||||
| Total current assets | 7,844,911 | 6,516,567 | 3,606,662 | |||||||||||||||||||||||
| Property and equipment, net | 2,784,286 | 2,706,884 | 2,565,882 | |||||||||||||||||||||||
| Operating lease assets | 3,032,175 | 3,132,056 | 3,042,298 | |||||||||||||||||||||||
| Other long-term assets | 254,362 | 215,159 | 200,999 | |||||||||||||||||||||||
| Total assets | $ | 13,915,734 | $ | 12,570,666 | $ | 9,415,841 | ||||||||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||||||
| Accounts payable | $ | 2,652,881 | $ | 2,426,390 | $ | 1,480,205 | ||||||||||||||||||||
| Accrued expenses and other | 625,426 | 655,408 | 496,623 | |||||||||||||||||||||||
| Current operating lease liabilities | 620,675 | 590,122 | 559,433 | |||||||||||||||||||||||
| Accrued payroll and benefits | 512,336 | 269,709 | 321,977 | |||||||||||||||||||||||
| Current portion of long-term debt | 64,991 | — | — | |||||||||||||||||||||||
| Total current liabilities | 4,476,309 | 3,941,629 | 2,858,238 | |||||||||||||||||||||||
| Long-term debt | 2,451,283 | 2,512,037 | 312,778 | |||||||||||||||||||||||
| Non-current operating lease liabilities | 2,551,162 | 2,672,139 | 2,601,372 | |||||||||||||||||||||||
| Other long-term liabilities | 296,819 | 290,795 | 225,934 | |||||||||||||||||||||||
| Deferred income taxes | 156,944 | 135,029 | 140,740 | |||||||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||||||||
| Stockholders’ Equity | 3,983,217 | 3,019,037 | 3,276,779 | |||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 13,915,734 | $ | 12,570,666 | $ | 9,415,841 | ||||||||||||||||||||
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| Ross Stores, Inc. | ||||||||||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||||||||
| ($000, unaudited) | October 30, 2021 | October 31, 2020 | November 2, 2019 | |||||||||||||||||||||||
| Cash Flows From Operating Activities | ||||||||||||||||||||||||||
| Net earnings (loss) | $ | 1,355,767 | $ | (152,598) | $ | 1,204,795 | ||||||||||||||||||||
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||||
| Depreciation and amortization | 262,139 | 268,193 | 255,089 | |||||||||||||||||||||||
| Loss on early extinguishment of debt | — | 239,769 | — | |||||||||||||||||||||||
| Stock-based compensation | 96,775 | 74,267 | 70,600 | |||||||||||||||||||||||
| Deferred income taxes | 35,077 | (14,650) | 23,070 | |||||||||||||||||||||||
| Change in assets and liabilities: | ||||||||||||||||||||||||||
| Merchandise inventory | (722,260) | 201,949 | (418,354) | |||||||||||||||||||||||
| Other current assets | (50,139) | (31,732) | (46,161) | |||||||||||||||||||||||
| Accounts payable | 422,277 | 1,126,574 | 305,648 | |||||||||||||||||||||||
| Other current liabilities | 160,984 | 118,679 | 43,968 | |||||||||||||||||||||||
| Income taxes | (60,442) | (119,513) | (42,619) | |||||||||||||||||||||||
| Operating lease assets and liabilities, net | 4,767 | 8,979 | 12,911 | |||||||||||||||||||||||
| Other long-term, net | (1,292) | 63,206 | 1,983 | |||||||||||||||||||||||
| Net cash provided by operating activities | 1,503,653 | 1,783,123 | 1,410,930 | |||||||||||||||||||||||
| Cash Flows From Investing Activities | ||||||||||||||||||||||||||
| Additions to property and equipment | (377,916) | (339,545) | (401,251) | |||||||||||||||||||||||
| Proceeds from investments | — | — | 517 | |||||||||||||||||||||||
| Net cash used in investing activities | (377,916) | (339,545) | (400,734) | |||||||||||||||||||||||
| Cash Flows From Financing Activities | ||||||||||||||||||||||||||
| Issuance of common stock related to stock plans | 18,626 | 17,088 | 16,451 | |||||||||||||||||||||||
| Treasury stock purchased | (57,092) | (45,091) | (56,920) | |||||||||||||||||||||||
| Repurchase of common stock | (416,979) | (132,467) | (965,909) | |||||||||||||||||||||||
| Dividends paid | (304,520) | (101,411) | (278,370) | |||||||||||||||||||||||
| Net proceeds from issuance of short-term debt | — | 805,601 | — | |||||||||||||||||||||||
| Payments of short-term debt | — | (804,972) | — | |||||||||||||||||||||||
| Net proceeds from issuance of long-term debt | — | 2,965,115 | — | |||||||||||||||||||||||
| Payments of long-term debt | — | (775,009) | — | |||||||||||||||||||||||
| Payments of debt extinguishment and debt issuance costs | — | (232,000) | — | |||||||||||||||||||||||
| Net cash (used in) provided by financing activities | (759,965) | 1,696,854 | (1,284,748) | |||||||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents | 365,772 | 3,140,432 | (274,552) | |||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash and cash equivalents: | ||||||||||||||||||||||||||
| Beginning of period | 4,953,769 | 1,411,410 | 1,478,079 | |||||||||||||||||||||||
| End of period | $ | 5,319,541 | $ | 4,551,842 | $ | 1,203,527 | ||||||||||||||||||||
| Reconciliations: | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 5,259,595 | $ | 4,416,124 | $ | 1,142,709 | ||||||||||||||||||||
| Restricted cash and cash equivalents included in prepaid expenses and other | 10,790 | 85,322 | 10,947 | |||||||||||||||||||||||
| Restricted cash and cash equivalents included in other long-term assets | 49,156 | 50,396 | 49,871 | |||||||||||||||||||||||
| Total cash, cash equivalents, and restricted cash and cash equivalents: | $ | 5,319,541 | $ | 4,551,842 | $ | 1,203,527 | ||||||||||||||||||||
| Supplemental Cash Flow Disclosures | ||||||||||||||||||||||||||
| Interest paid | $ | 82,209 | $ | 70,347 | $ | 10,560 | ||||||||||||||||||||
| Income taxes paid | $ | 454,821 | $ | 10,207 | $ | 388,426 | ||||||||||||||||||||
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