10-KPeriod: FY2009

ROSS STORES, INC. Annual Report, Year Ended Jan 31, 2009

Filed March 31, 2009For Securities:ROST

Summary

Ross Stores, Inc. (ROST) reported strong performance in its 2009 10-K filing, reflecting resilience in its off-price retail model amidst a challenging economic climate. The company demonstrated consistent sales growth, driven by strategic store expansion and the increasing consumer demand for value. Despite macroeconomic pressures, ROST maintained tight control over operating expenses and inventory levels, contributing to improved profitability and earnings per share. The company also continued its commitment to returning value to shareholders through consistent dividend payments and an active stock repurchase program. Financially, ROST showcased robust operating cash flow, enabling continued investment in new stores and store enhancements while also supporting shareholder returns. The balance sheet remained solid, with sufficient liquidity and manageable debt levels. The company's strategic focus on providing name-brand merchandise at significant discounts appears to resonate well with consumers navigating economic uncertainty, positioning it favorably for sustained performance.

Financial Highlights

25 data points
Beta

Revenue

$6.49B

23.6% Gross Margin

Net Income

$305.44M

4.7% Net Margin

EPS (Diluted)

$0.58

Free Cash Flow

$359.02M

Financial Statements
Beta
Revenue$6.49B
Cost of Revenue$4.96B
Gross Profit$1.53B
SG&A Expenses$1.03B
Operating Expenses$5.99B
Net Income$305.44M
EPS (Basic)$0.59
EPS (Diluted)$0.58
Shares Outstanding (Basic)516.94M
Shares Outstanding (Diluted)525.26M

Key Highlights

  • 1Achieved 8.6% sales growth in fiscal 2008 to $6.49 billion, outpacing the broader national apparel market which declined.
  • 2Comparable store sales increased by 2% in fiscal 2008, indicating healthy performance in existing locations.
  • 3Net earnings increased by 17% to $305.4 million in fiscal 2008, with diluted EPS rising 23% to $2.33.
  • 4Expanded its store base by 66 net new stores in fiscal 2008, reaching a total of 956 locations.
  • 5Returned significant capital to shareholders through a $300 million stock repurchase program and consistent dividend payments, with the dividend per share increasing from $0.320 in 2007 to $0.395 in 2008.
  • 6Maintained strong operating cash flow of $583.4 million in fiscal 2008, supporting investments and shareholder returns.
  • 7The company's cost of goods sold as a percentage of sales decreased by approximately 90 basis points in fiscal 2008, driven by a 100 basis point increase in merchandise gross margin.

Frequently Asked Questions

Ross Stores demonstrated resilience and strong performance in fiscal 2008, achieving an 8.6% increase in sales to $6.49 billion. This growth was supported by a 2% increase in comparable store sales and the opening of 66 net new stores. The company's off-price model benefited from increased consumer demand for value, allowing it to outperform the broader national apparel market which saw a decline.

Ross Stores actively returns capital to shareholders through a combination of stock repurchases and dividends. In fiscal 2008, the company repurchased $300 million of its common stock under a $600 million program initiated in January 2008. Additionally, the quarterly cash dividend per share increased from $0.320 in 2007 to $0.395 in 2008, reflecting confidence in its financial position and future prospects.

The company maintained tight controls over inventory levels and operating expenses in fiscal 2008. Notably, the cost of goods sold as a percentage of sales decreased by approximately 90 basis points, primarily due to a 100 basis point improvement in merchandise gross margin, indicating effective sourcing and pricing strategies. Selling, general, and administrative expenses increased primarily due to store expansion but were managed as a percentage of sales.

The filing suggests a positive outlook, with continued strategic store expansion planned. The company anticipates further macroeconomic pressures in 2009 but plans to manage them through tight inventory and expense controls. The off-price retail sector's increasing market share and continued customer demand for discounted name brands position Ross Stores favorably for ongoing growth.