ROSS STORES, INC. Quarterly Report for Q3 Ended Oct 31, 2015

Summary

Ross Stores, Inc. (ROST) reported solid financial results for the third quarter and nine months ended October 31, 2015. Total sales saw a notable increase, driven by both new store openings and positive comparable store sales growth. The company demonstrated improved profitability with net earnings increasing year-over-year, supported by better cost management, particularly in the cost of goods sold. Financially, the company maintained a strong liquidity position, though operating cash flow saw a decrease compared to the prior year primarily due to inventory management strategies (packaway). Investing activities reflected a planned reduction in capital expenditures. The company continued to return value to shareholders through significant stock repurchases and increased dividend payouts, underscoring confidence in its ongoing financial health and strategic direction.

Key Highlights

• 1Total sales increased by 7.1% to $2.78 billion for the three months ended October 31, 2015, and by 8.5% to $8.69 billion for the nine months ended October 31, 2015.
• 2Comparable store sales grew by 3% for the third quarter and 4% for the first nine months of fiscal year 2015.
• 3Net earnings increased to $215.7 million ($0.53 per diluted share) for the third quarter and $756.5 million ($1.85 per diluted share) for the first nine months, representing significant year-over-year growth.
• 4Cost of goods sold as a percentage of sales decreased for both the three and nine month periods, driven by improved merchandise margin.
• 5The company expanded its store base, opening 26 net new stores in the third quarter, bringing the total store count to 1,448.
• 6Cash used in financing activities was substantial, primarily due to $530.3 million in stock repurchases during the nine-month period.
• 7The company declared a cash dividend of $0.1175 per common share, reflecting a consistent commitment to shareholder returns.

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