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 pointsBeta
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.
Frequently Asked Questions
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.
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.
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.
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.