10-KPeriod: FY2001

ROSS STORES, INC. Annual Report, Year Ended Feb 3, 2001

Filed April 27, 2001For Securities:ROST

Summary

Ross Stores, Inc. (ROST) reported its fiscal year 2000 results, which concluded on February 3, 2001. The company, a prominent off-price retailer, operates 409 stores and focuses on offering branded apparel and home accessories at discounts of 20-60% below traditional retail prices. For the fiscal year, Ross Stores demonstrated solid sales growth, with total sales reaching $2.71 billion, an increase of 10% over the prior year. While comparable store sales growth moderated to 1%, the company's strategic expansion continued with the opening of 34 new stores. Financially, the company maintained healthy profitability with net earnings of $151.8 million. Diluted earnings per share stood at $1.82. Ross Stores also actively returned capital to shareholders through dividends and share repurchases, highlighting a commitment to shareholder value. The company is investing in its future through infrastructure improvements, including plans for a new distribution center, and by enhancing its merchandise buying and allocation systems to further optimize its offerings and margins.

Key Highlights

  • 1Total sales grew by 10% to $2.71 billion for fiscal year 2000 (53-week year).
  • 2Comparable store sales growth was 1% for the fiscal year.
  • 3Net earnings were $151.8 million, with diluted EPS of $1.82.
  • 4The company operated 409 stores at year-end, having opened 34 new locations and closed 3.
  • 5Ross Stores increased its quarterly cash dividend to $0.0425 per share.
  • 6Significant share repurchases continued, with $169 million in common stock bought back during the fiscal year.
  • 7Plans are underway to construct a new, larger distribution center in North Carolina to support future growth.

Frequently Asked Questions

Ross Stores operates as an off-price retailer, offering first-quality, brand-name apparel, shoes, accessories, and home products at prices generally 20% to 60% below traditional department and specialty store prices. Their target customer is value-conscious men and women aged 25-54 from middle to upper-middle income households.

The company utilizes various off-price buying strategies, including purchasing later in the buying cycle, taking advantage of manufacturer overruns and canceled orders ('closeouts'), and opportunistic 'packaway' purchases (buying in-season merchandise for storage and sale in a subsequent season). Packaway merchandise accounted for approximately 45% of total inventories, a key driver of their competitive discounts.

Ross Stores is focused on expanding its store base, primarily in existing market areas, with plans to enter new markets in Georgia, North Carolina, and South Carolina in fiscal 2001. Significant investment is also planned for a new, larger distribution center in North Carolina to enhance efficiency and capacity, alongside upgrades to information systems for better merchandise buying and allocation.

Ross Stores returns value to shareholders through consistent quarterly cash dividends, which were increased to $0.0425 per share in early 2001. Additionally, the company continued its aggressive stock repurchase program, buying back $169 million of its common stock in fiscal year 2000 under a $300 million authorization.