Summary
Ross Stores, Inc. (ROST) reported robust performance for the second quarter and first half of fiscal year 2012, demonstrating strong sales growth driven by both new store openings and significant increases in comparable store sales. For the three months ended July 28, 2012, total sales increased by 12.0% to $2.34 billion, with comparable store sales growing 7%. This momentum carried into the six-month period, with sales up 12.8% to $4.70 billion and comparable store sales increasing by 8%. Net earnings per diluted share saw a substantial jump of 27% for the quarter and 26% for the first half, signaling effective cost management and favorable merchandise margins despite increased operating expenses from store expansion. The company's financial condition remains strong, supported by healthy operating cash flows. While investing activities showed slightly higher capital expenditures for store growth and system improvements, financing activities were marked by significant stock repurchases and increased dividend payments, reflecting a commitment to shareholder returns. Ross Stores continues its strategic expansion, with 1,174 stores operating by the end of the period, and remains confident in its ability to fund planned capital expenditures, stock buybacks, and dividends through existing cash and operational cash flows.
Financial Highlights
47 data points| Revenue | $2.34B |
| Cost of Revenue | $1.69B |
| Gross Profit | $651.21M |
| SG&A Expenses | $352.09M |
| Operating Expenses | $2.04B |
| Net Income | $182.02M |
| EPS (Basic) | $0.41 |
| EPS (Diluted) | $0.41 |
| Shares Outstanding (Basic) | 440.13M |
| Shares Outstanding (Diluted) | 447.21M |
Key Highlights
- 1Total sales for the three months ended July 28, 2012, rose 12.0% to $2.34 billion, driven by 83 net new stores and a 7% increase in comparable store sales.
- 2For the six months ended July 28, 2012, total sales grew 12.8% to $4.70 billion, with comparable store sales up 8%.
- 3Diluted earnings per share increased significantly by 27% for the quarter ($0.81 vs. $0.64) and 26% for the first half ($1.74 vs. $1.38), benefiting from higher net earnings and a reduced share count due to buybacks.
- 4Cost of goods sold as a percentage of sales decreased by approximately 80 basis points for the quarter and 45 basis points for the six months, primarily due to improved merchandise gross margins and better leverage of occupancy and distribution costs.
- 5Selling, general, and administrative expenses as a percentage of sales decreased due to leverage from strong comparable store sales gains, despite overall increases due to new store openings.
- 6Operating cash flow for the six months improved significantly to $504.2 million from $161.7 million in the prior year, largely due to increased accounts payable leverage.
- 7The company repurchased approximately $223.7 million of common stock in the first six months of fiscal 2012 as part of its ongoing $900 million repurchase program.