Summary
Ross Stores, Inc. (ROST) reported strong performance in its 2010 10-K filing, demonstrating robust sales growth and profitability, even amidst a challenging macroeconomic environment. The company successfully navigated the economic pressures by adhering to its core off-price retail strategy, focusing on value-conscious consumers seeking name-brand apparel and home accessories at significant discounts. Its diversified store base, comprising both the larger Ross Dress for Less format and the smaller dd's DISCOUNTS, contributed to this success by catering to different income demographics. Key to its operational efficiency is a well-honed merchandising and purchasing strategy. Ross leverages opportunistic buying, such as close-outs and packaway inventory, to secure desirable merchandise at lower costs, which it then passes on to customers. Investments in information systems to enhance localized merchandising and a continued focus on operational efficiency, including cost management, further bolster its competitive advantage and financial health. The company's consistent store growth and solid financial position, supported by strong operating cash flows and ongoing share repurchase programs, position it favorably for continued success.
Financial Highlights
25 data points| Revenue | $7.18B |
| Cost of Revenue | $5.33B |
| Gross Profit | $1.86B |
| SG&A Expenses | $1.13B |
| Operating Expenses | $6.47B |
| Net Income | $442.76M |
| EPS (Basic) | $0.90 |
| EPS (Diluted) | $0.89 |
| Shares Outstanding (Basic) | 491.55M |
| Shares Outstanding (Diluted) | 500.06M |
Key Highlights
- 1Ross Stores operated 1,005 stores (953 Ross Dress for Less and 52 dd's DISCOUNTS) as of January 30, 2010, indicating significant scale and market penetration.
- 2The company reported a 10.8% increase in sales for fiscal 2009, reaching $7.18 billion, driven by both new store openings and a 6% comparable store sales increase.
- 3Net earnings increased substantially by 45% in fiscal 2009 to $442.7 million, with diluted EPS rising to $3.54 from $2.33 in the prior year.
- 4Gross margins improved due to lower cost of goods sold as a percentage of sales (74.2% in 2009 vs. 76.4% in 2008), reflecting strong merchandising and buying strategies.
- 5Ross Stores continued to return capital to shareholders, declaring dividends and repurchasing approximately $300 million in stock in fiscal 2009 under a new $750 million repurchase program for fiscal years 2010-2011.
- 6Investments in information systems and supply chain enhancements were made to improve merchandising capabilities and operational efficiency.
- 7Packaway inventory represented a significant portion (38%) of total inventories, highlighting a key strategy for securing branded merchandise at discounts.