Summary
Ross Stores, Inc. reported its first-quarter results for the period ending May 5, 2001. While total sales increased by 6.5% year-over-year to $674.4 million, this growth was primarily driven by store expansion rather than comparable store sales, which actually declined by 3%. This decrease in comparable store sales led to reduced leverage on occupancy and administrative expenses, contributing to a lower net earnings margin of 5.1% compared to 6.4% in the prior year's quarter. Despite the pressure on sales and margins, the company's financial position remains solid. Cash and cash equivalents increased to $38.3 million. Inventory levels grew 9% year-over-year, reflecting the increased store count. The company continued its share repurchase program, buying back $33.2 million in stock during the quarter, and has ample liquidity through its credit facilities to fund operations, repurchases, and planned capital expenditures, including a new distribution center in North Carolina.
Key Highlights
- 1Total sales increased 6.5% to $674.4 million for the first quarter, compared to $633.4 million in the prior year.
- 2Comparable store sales decreased by 3%, indicating a slowdown in sales at existing locations.
- 3Net earnings decreased to $34.7 million ($0.43 per diluted share) from $40.8 million ($0.47 per diluted share) in the prior year's quarter, reflecting margin pressure.
- 4The company repurchased approximately 1.6 million shares of common stock for $33.2 million during the quarter as part of its ongoing share repurchase program.
- 5Inventories increased by 9% to $607.3 million, reflecting expansion and potentially cautious inventory management.
- 6The company is planning to build a new 1.3 million square foot distribution center near Charlotte, North Carolina, to be financed through an operating lease.
- 7Liquidity remains strong, with $38.3 million in cash and cash equivalents and access to significant revolving credit facilities.