Summary
Ross Stores, Inc. reported a solid first quarter for fiscal year 2019, with sales increasing by 5.8% to $3.8 billion compared to the prior year's first quarter. This growth was driven by both an increase in comparable store sales (2%) and the addition of 94 net new stores. Net earnings remained stable at $421.1 million, or $1.15 per diluted share, showing a modest 4% increase from the previous year's $1.11 per share, largely due to a reduction in weighted average diluted shares outstanding resulting from a robust stock repurchase program. The company's financial condition remains strong, supported by robust operating cash flows of $509 million. While capital expenditures increased to $95.6 million to support store expansion and investments, the company actively returned capital to shareholders through significant stock repurchases totaling $320.1 million and dividend payments of $93.7 million. The adoption of new lease accounting standards (ASC 842) significantly impacted the balance sheet by introducing substantial operating lease assets and liabilities, but management noted it had no significant impact on the statements of earnings or cash flows.
Financial Highlights
50 data points| Revenue | $3.80B |
| Cost of Revenue | $2.70B |
| Gross Profit | $1.09B |
| SG&A Expenses | $558.25M |
| Operating Expenses | $3.25B |
| Interest Expense | $3.28M |
| Net Income | $421.14M |
| EPS (Basic) | $1.16 |
| EPS (Diluted) | $1.15 |
| Shares Outstanding (Basic) | 363.08M |
| Shares Outstanding (Diluted) | 365.91M |
Key Highlights
- 1Sales increased by 5.8% to $3.8 billion in the first quarter, driven by comparable store sales growth of 2% and the addition of 94 net new stores.
- 2Net earnings were $421.1 million, a slight increase from the prior year, with diluted EPS rising 4% to $1.15, aided by a reduction in outstanding shares due to buybacks.
- 3Operating cash flow was strong at $509 million, supporting investments and capital returns to shareholders.
- 4The company repurchased approximately $320.1 million of its common stock and paid $93.7 million in dividends, demonstrating a commitment to shareholder returns.
- 5Capital expenditures increased to $95.6 million, primarily for new store openings and enhancements, reflecting ongoing expansion efforts.
- 6The adoption of ASC 842 (Leases) led to a significant increase in reported operating lease assets and liabilities on the balance sheet, though it did not materially affect earnings or cash flows.
- 7The company maintained a healthy store count, ending the quarter with 1,745 stores, an increase of 94 net new stores year-over-year.