What was the key driver of sales growth in the reported period?

Sales growth was driven by a combination of new store openings (77 net new stores between August 1, 2015, and July 30, 2016) and a comparable store sales increase of 4% for the three-month period and 3% for the six-month period.

How did the company's profitability evolve in this quarter?

Profitability improved, with net earnings increasing to $281.9 million for the three months ended July 30, 2016. This improvement was supported by a decrease in cost of goods sold as a percentage of sales, primarily due to a higher merchandise margin and lower distribution and buying costs.

What is the company's strategy for capital allocation?

Ross Stores focuses on returning capital to shareholders through share repurchases and dividend payments. During the first six months of fiscal 2016, the company repurchased approximately $351.5 million of its common stock and paid out $108.1 million in cash dividends.

Are there any significant upcoming accounting changes that investors should be aware of?

The company is assessing the impact of two upcoming accounting standards: ASU 2016-09, which simplifies share-based payment accounting, and ASU 2016-02, which requires balance sheet recognition for leases. ASU 2016-09 is effective for fiscal 2017, and ASU 2016-02 is effective for fiscal 2019. They have also early adopted ASU 2015-17 related to deferred tax asset and liability classification.

ROST 10-Q Quarterly Report Q2 FY2017 — Revenue, Net Income, EPS

Summary

Ross Stores, Inc. reported strong financial results for the second quarter and first half of fiscal year 2016, demonstrating continued growth and profitability. Sales increased by 7.2% in the quarter and 6.2% year-to-date, driven by both new store openings and comparable store sales growth. Net earnings saw a healthy increase, with diluted EPS rising to $0.71 for the quarter and $1.44 year-to-date, up from $0.63 and $1.32 respectively in the prior year. The company also maintained a robust cash flow from operations and actively returned capital to shareholders through share repurchases and dividends.

Financial Highlights

48 data points

Beta

Revenue

$3.18B

0.3% Gross Margin

Net Income

$281.91M

0.1% Net Margin

EPS (Diluted)

$0.71

Total Assets

$5.19B

Cash & Equivalents

$927.72M

Free Cash Flow

$242.77M

Financial Statements

Beta

Revenue	$3.18B
Cost of Revenue	$2.25B
Gross Profit	$929.07M
SG&A Expenses	$469.51M
Operating Expenses	$2.73B
Interest Expense	$4.64M
Net Income	$281.91M
EPS (Basic)	$0.72
EPS (Diluted)	$0.71
Shares Outstanding (Basic)	393.57M
Shares Outstanding (Diluted)	395.93M

Key Highlights

1Net sales increased by 7.2% to $3.18 billion for the three months ended July 30, 2016.
2Comparable store sales increased by 4% for the three months ended July 30, 2016.
3Diluted earnings per share (EPS) rose to $0.71 for the three months ended July 30, 2016, an increase from $0.63 in the prior year.
4The company opened 31 new stores in the quarter, bringing the total store count to 1,501.
5Net cash provided by operating activities was $779.6 million for the six months ended July 30, 2016, a significant increase from $590.4 million in the prior year.
6The company repurchased $351.5 million of common stock during the six-month period and paid $108.1 million in dividends.
7Cost of goods sold as a percentage of sales decreased due to improved merchandise margins and lower distribution and buying costs.

ROSS STORES, INC. Quarterly Report for Q2 Ended Jul 30, 2016

Summary

Financial Highlights

Key Highlights

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