10-QPeriod: Q1 FY2017

ROSS STORES, INC. Quarterly Report for Q1 Ended Apr 30, 2016

Filed June 8, 2016For Securities:ROST

Summary

Ross Stores, Inc. reported solid financial results for the first quarter ended April 30, 2016. The company demonstrated top-line growth with a 5.1% increase in sales to $3.09 billion, driven by both new store openings and a 2% comparable store sales increase. Net earnings rose to $290.6 million, or $0.73 per diluted share, up from $282.2 million, or $0.69 per diluted share, in the prior year's first quarter. This performance reflects the company's continued execution of its off-price retail strategy across its Ross Dress for Less and dd's DISCOUNTS banners. Financially, Ross Stores maintained a strong liquidity position, with cash and cash equivalents increasing significantly to $910 million. Operating cash flows were robust, supporting investments in capital expenditures, stock repurchases, and dividend payments. The company also continues its strategic store expansion, ending the quarter with 1,473 stores, a net increase of 74 stores compared to the previous year. Management reiterated its confidence in its strategies to navigate the competitive retail landscape and provided guidance for fiscal year 2016, anticipating continued growth.

Financial Highlights

48 data points
Beta

Revenue

$3.09B

29.5% Gross Margin

Net Income

$290.63M

9.4% Net Margin

EPS (Diluted)

$0.73

Total Assets

$5.11B

Cash & Equivalents

$910.02M

Free Cash Flow

$389.36M

Financial Statements
Beta
Revenue$3.09B
Cost of Revenue$2.18B
Gross Profit$912.79M
SG&A Expenses$436.92M
Operating Expenses$2.62B
Interest Expense$4.64M
Net Income$290.63M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Basic)395.80M
Shares Outstanding (Diluted)398.81M

Key Highlights

  • 1Sales increased by 5.1% to $3.09 billion in the first quarter of fiscal 2016 compared to the prior year.
  • 2Comparable store sales grew by 2%, indicating healthy performance in established locations.
  • 3Net earnings rose to $290.6 million, resulting in diluted EPS of $0.73, an increase from $0.69 in the prior year.
  • 4The company expanded its store base, ending the quarter with 1,473 stores, a net increase of 74 stores year-over-year.
  • 5Cash and cash equivalents significantly increased to $910 million, demonstrating strong liquidity.
  • 6Operating cash flow remained strong at $469 million, supporting business operations and shareholder returns.
  • 7The company repurchased approximately $175.8 million worth of common stock during the quarter and declared a cash dividend of $0.1350 per share.

Frequently Asked Questions

Ross Stores reported a 5.1% increase in sales for the first quarter ended April 30, 2016, reaching $3.09 billion. This growth was attributed to the opening of 74 net new stores and a 2% increase in comparable store sales.

Net earnings increased to $290.6 million in the first quarter of fiscal 2016 from $282.2 million in the prior year. Consequently, diluted earnings per share improved to $0.73 from $0.69.

As of April 30, 2016, Ross Stores operated 1,473 stores, a net increase of 74 stores compared to the same period in the previous year. The company continues to pursue opportunistic real estate acquisitions and new store locations based on market penetration and demographic characteristics.

The company maintained a strong liquidity position, with cash and cash equivalents growing to $910 million at the end of the quarter. Operating cash flow was robust at $469 million, and the company has access to a $600 million revolving credit facility, remaining undrawn at the period end.