How did the COVID-19 pandemic impact Ross Stores' financial performance in fiscal year 2020?

The COVID-19 pandemic significantly impacted Ross Stores in fiscal year 2020, leading to a 21.9% decrease in sales primarily due to temporary store closures during the first half of the year, mandated occupancy restrictions, and reduced operating hours. This also resulted in a substantial drop in diluted earnings per share to $0.24 from $4.60 in the prior year. The company incurred additional operating costs related to safety protocols and implemented measures to preserve liquidity, such as suspending its stock repurchase program and dividends.

What is Ross Stores' strategy for growth and store expansion following the pandemic?

Ross Stores plans to continue its store expansion strategy, focusing on opening new stores in states where it currently operates to increase market penetration and leverage overhead expenses. While the pace of new store openings was reduced in fiscal year 2020 due to the pandemic, the company anticipates resuming more normal expansion plans in fiscal year 2021, with a projected capital expenditure of approximately $700 million. Key considerations for new locations include demographics, competition, and population density.

How is Ross Stores managing its inventory and supply chain costs in the current environment?

The company is actively managing inventory, utilizing packaway inventory to replenish stores and closely monitoring receipts. However, it faces challenges from increased freight costs due to industry-wide supply chain congestion, which are expected to continue into fiscal year 2021. Ross Stores also incurred higher distribution costs and is anticipating higher overall operating costs related to ongoing COVID-19 safety measures and wage increases implemented in late 2020.

What is the company's financial position and liquidity outlook?

Ross Stores ended fiscal year 2020 with a strong liquidity position, reporting over $5.6 billion in total liquidity, comprising $4.8 billion in unrestricted cash and cash equivalents and $800 million available under its revolving credit facility. The company believes these resources are adequate to meet its operating, investing, and financing needs for at least the next 12 months, despite the ongoing uncertainties from the pandemic.

ROST 10-K FY2021 Annual Report — Revenue, Net Income, EPS

Summary

Ross Stores, Inc. (ROST) reported its fiscal year 2020 results, which concluded on January 30, 2021. The company experienced a significant sales decline of 21.9% due to the unprecedented impact of the COVID-19 pandemic, which led to temporary store closures, mandated occupancy restrictions, and reduced operating hours. Despite these challenges, the company demonstrated resilience, with core business results improving in the second half of the fiscal year, aided by pent-up consumer demand and aggressive markdowns. Ross Stores ended the fiscal year with strong liquidity, holding over $5.6 billion in cash and available credit. The company maintained its strategic focus on value and convenience for its off-price retail model, operating 1,585 Ross Dress for Less stores and 274 dd's DISCOUNTS stores. While fiscal year 2020 saw a reduction in new store openings compared to prior years, the company is planning for continued expansion in fiscal year 2021, leveraging its market penetration strategy. Despite the negative impact of COVID-19 on earnings and sales in fiscal 2020, the company has resumed its quarterly dividend payments and maintains a strong financial position to navigate ongoing economic uncertainties.

Financial Highlights

28 data points

Beta

Revenue

$12.53B

0.2% Gross Margin

Net Income

$85.38M

0.0% Net Margin

EPS (Diluted)

$0.24

Free Cash Flow

$1.84B

Financial Statements

Beta

Revenue	$12.53B
Cost of Revenue	$9.84B
Gross Profit	$2.69B
SG&A Expenses	$2.50B
Operating Expenses	$12.43B
Net Income	$85.38M
EPS (Basic)	$0.24
EPS (Diluted)	$0.24
Shares Outstanding (Basic)	352.39M
Shares Outstanding (Diluted)	354.62M

Key Highlights

1Fiscal year 2020 sales declined by 21.9% to $12.5 billion, primarily due to COVID-19 related disruptions including temporary store closures and reduced operating hours.
2The company ended fiscal year 2020 with robust liquidity, holding $4.8 billion in unrestricted cash and cash equivalents, and an additional $800 million available under its revolving credit facility.
3Ross Stores operated 1,859 stores (1,585 Ross, 274 dd's DISCOUNTS) as of January 30, 2021, with a plan to increase new store openings in fiscal year 2021.
4Diluted earnings per share significantly decreased to $0.24 in fiscal year 2020 from $4.60 in fiscal year 2019, reflecting the pandemic's impact.
5The company experienced higher cost of goods sold as a percentage of sales (78.5% in FY2020 vs. 71.9% in FY2019) due to markdowns, increased freight costs, and COVID-related expenses.
6Ross Stores resumed its quarterly dividend payment in March 2021, after temporarily suspending it in May 2020 due to economic uncertainty.
7The company identified managing inventory and supply chain costs, particularly higher freight costs and ongoing COVID-related expenses, as key challenges entering fiscal year 2021.

ROSS STORES, INC. Annual Report, Year Ended Jan 30, 2021

Summary

Financial Highlights

Key Highlights

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