How did Ross Stores perform in terms of sales and profitability during the quarter?

Ross Stores reported strong sales growth of 11.6% to $1.308 billion for the quarter ended July 29, 2006. Net earnings increased to $45.4 million, or $0.32 per diluted share, compared to $42.3 million, or $0.29 per diluted share, in the same period last year. This performance was driven by new store openings and a 4% increase in comparable store sales.

What is the company's strategy for growth, and how is it being executed?

The company's primary strategy is to refine its existing off-price business and steadily expand its store base. This is being executed by opening new stores, with 25 net new stores added in the quarter, bringing the total to 770. They are also focusing on leveraging local market penetration and demographic characteristics for store site selection.

How is the adoption of SFAS No. 123(R) impacting the company's financial reporting?

Ross Stores adopted SFAS No. 123(R), 'Share-Based Payment,' effective at the beginning of fiscal year 2006. This standard requires the recognition of compensation expense for stock-based awards based on their grant date fair value. The adoption impacted results by decreasing earnings before taxes by approximately $3.3 million and net income by $2.0 million for the second quarter, primarily affecting Cost of Goods Sold and Selling, General, and Administrative expenses.

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

The company maintains a strong liquidity position, with net cash provided by operating activities at $169.1 million for the six-month period. They have repaid term debt, amended their revolving credit facility, and have ample resources to fund planned capital expenditures, stock repurchases, and dividends. Management believes current cash flows and credit facilities are adequate for at least the next twelve months.

ROST 10-Q Quarterly Report Q2 FY2007 — Revenue, Net Income, EPS

Summary

Ross Stores, Inc. (ROST) reported solid financial results for the quarter ended July 29, 2006. The company demonstrated strong sales growth, driven by both new store openings and comparable store sales increases. Net earnings and earnings per share saw a notable improvement compared to the prior year's period, reflecting the company's effective operational strategies and a decrease in outstanding shares due to ongoing stock repurchases. Financially, the company maintained a healthy liquidity position, supported by robust cash flow from operations. Significant investments were made in capital expenditures, primarily for new store openings and distribution center enhancements. The company also actively managed its capital structure, repaying term debt and amending its revolving credit facility, while continuing its share repurchase program and dividend payments. Management expressed confidence in the company's ability to fund its ongoing operations and growth initiatives.

Key Highlights

1Total sales increased by 11.6% to $1.308 billion for the quarter, and by 13.2% to $2.600 billion for the six-month period, compared to the prior year.
2Comparable store sales grew by 4% for the quarter and 5% for the six-month period, indicating consistent demand for Ross's offerings.
3Net earnings rose to $45.4 million ($0.32 per diluted share) for the quarter, an increase from $42.3 million ($0.29 per diluted share) in the prior year.
4Diluted earnings per share increased to $0.32 for the quarter and $0.73 for the six-month period, up from $0.29 and $0.62 respectively, year-over-year.
5The company opened 25 new stores during the quarter, bringing the total store count to 770 at the end of the period.
6Operating cash flow significantly increased to $169.1 million for the six-month period, providing strong financial flexibility.
7The company repaid its $50 million term debt in March 2006 and amended its $600 million revolving credit facility in July 2006, extending its maturity.
8A substantial stock repurchase program was underway, with nearly $99 million spent on repurchasing shares during the six-month period.

ROSS STORES, INC. Quarterly Report for Q2 Ended Jul 29, 2006

Summary

Key Highlights

Frequently Asked Questions