01—Abstract
Summary
Summary of the 10-K filed March 29, 2022. Cited figures are marked; the original filing is the authoritative source.
Ross Stores, Inc. (ROST) reported solid performance in its fiscal year ended January 29, 2022, following a challenging prior year impacted by COVID-19.
Sales increased significantly by 50.9% year-over-year, driven by the full operational capacity of all stores and a rebound in consumer demand, benefiting from government stimulus and reduced pandemic restrictions. The company saw a substantial recovery in net earnings, which rose to $1.72 billiona from $85.4 million in the prior year, reflecting strong sales execution and improved operational efficiency. Looking ahead, Ross Stores plans to accelerate its store expansion strategy, anticipating an increase in new store openings.
The company highlighted its ability to navigate supply chain congestion and inflationary pressures, though acknowledged these as ongoing risks. Management expressed confidence in the off-price model's appeal to value-conscious consumers and the company's position for continued market share gains. The company also continued its commitment to returning capital to shareholders through dividends and substantial share repurchases.
02—Key points
Key Highlights
- Sales surged by 50.9% to $18.9 billion in fiscal 2021, a significant recovery from the pandemic-impacted fiscal 2020, and also exceeded fiscal 2019 sales levels.
- Net earnings dramatically increased to $1.72 billion ($4.87 per diluted share) from $85.4 million ($0.24 per diluted share) in fiscal 2020, demonstrating a strong profit recovery.
- Comparable store sales increased by 13% in fiscal 2021 compared to fiscal 2019, indicating a healthy rebound in customer traffic and purchasing at existing locations.
- The company plans to increase its pace of new store openings to approximately 100 stores annually in fiscal 2022 and anticipates exceeding this pace in the longer term.
- Ross Stores maintained a strong liquidity position, ending fiscal 2021 with $4.9 billion in cash and cash equivalents, supported by robust operating cash flows.
- The company demonstrated a commitment to shareholder returns, with a quarterly cash dividend of $0.310 declared and a new two-year stock repurchase program authorized for up to $1.9 billion.
- Despite ongoing supply chain congestion and inflationary pressures, Ross Stores highlighted its effective merchandising and operational strategies to manage costs and deliver value.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed March 29, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $18.92B$12.53B | +50.9% |
| Cost of Revenue | $13.71B$9.84B | +39.3% |
| Gross Profit | $5.21B$2.69B | +93.4% |
| SG&A Expenses | $2.87B$2.50B | +14.8% |
| Operating Expenses | $16.66B$12.43B | +34.1% |
| Net Income | $1.72B$85.38M | +1917.5% |
| EPS (Basic) | $4.90$0.24 | +1941.7% |
| EPS (Diluted) | $4.87$0.24 | +1929.2% |
| Shares Outstanding (Basic) | 351.50M352.39M | −0.3% |
| Shares Outstanding (Diluted) | 353.73M354.62M | −0.2% |
05—Questions
Frequently Asked Questions
How did Ross Stores' financial performance in fiscal 2021 compare to the previous year and pre-pandemic levels?
In fiscal 2021, Ross Stores experienced a significant rebound, with sales increasing by 50.9% to $18.9 billion, surpassing fiscal 2019 levels. Net earnings also saw a substantial recovery, reaching $1.72 billion, a marked improvement from the $85.4 million reported in fiscal 2020. Comparable store sales grew by 13% compared to fiscal 2019, indicating strong performance in existing locations.
What is Ross Stores' outlook for store growth and expansion?
Ross Stores plans to accelerate its expansion, aiming to open approximately 100 new stores annually starting in fiscal 2022. The company anticipates exceeding this pace in the longer term, driven by perceived consumer trends favoring value and convenience, favorable store performance, and market share opportunities arising from retail closures.
What are the key risks and challenges facing Ross Stores?
Key risks and challenges include ongoing supply chain congestion, inflationary pressures impacting both consumer demand and operating costs, potential adverse effects from COVID-19 variants or future pandemics, and intense competition within the retail apparel market. The company also faces risks related to economic conditions, consumer spending habits, and labor costs.
How is Ross Stores managing its capital and returning value to shareholders?
Ross Stores maintained a strong liquidity position with $4.9 billion in cash and cash equivalents at the end of fiscal 2021. The company continued its commitment to shareholder returns by declaring quarterly cash dividends and implementing a new two-year stock repurchase program authorized for up to $1.9 billion through fiscal 2023.
06—Continue