Summary
Ross Stores, Inc. reported a significant net loss of $305.8 million for the first quarter of fiscal 2020, a stark contrast to the $421.1 million net income in the prior year's first quarter. This downturn was primarily driven by the unprecedented impact of the COVID-19 pandemic, which led to the temporary closure of all store locations from March 20, 2020, through the end of the quarter. This resulted in a 51.5% decline in sales, from $3.8 billion to $1.8 billion. The company also incurred a substantial $313 million inventory valuation charge due to expected sales below cost for aged and seasonal merchandise. In response to the pandemic and to bolster liquidity, Ross Stores significantly increased its debt, drawing $800 million from its revolving credit facility and issuing $2.0 billion in senior notes. The company also suspended its stock repurchase program and quarterly dividends. While stores have begun a phased reopening, management anticipates continued material adverse effects from the pandemic throughout fiscal 2020 due to ongoing uncertainties regarding consumer demand and potential resurgences of the virus.
Financial Highlights
48 data points| Revenue | $1.84B |
| Cost of Revenue | $1.89B |
| Gross Profit | -$47.32M |
| SG&A Expenses | $415.31M |
| Operating Expenses | $2.31B |
| Net Income | -$305.84M |
| EPS (Basic) | $-0.87 |
| EPS (Diluted) | $-0.87 |
| Shares Outstanding (Basic) | 352.20M |
| Shares Outstanding (Diluted) | 352.20M |
Key Highlights
- 1Net loss of $305.8 million ($0.87 per share) for the quarter, a significant reversal from a net income of $421.1 million ($1.15 per share) in the prior year.
- 2Sales decreased by 51.5% to $1.84 billion, primarily due to the temporary closure of all stores from March 20, 2020, due to COVID-19.
- 3A substantial $313 million inventory valuation charge was recorded for inventory expected to be sold below cost.
- 4The company significantly increased its financial flexibility by borrowing $800 million under its revolving credit facility and issuing $2.0 billion in senior notes.
- 5Operating cash flow turned negative, showing $1.06 billion used in operations compared to $509 million provided in the prior year.
- 6Store count increased to 1,832 locations at the end of the period, up from 1,745 a year prior, despite reduced new store opening plans for fiscal 2020.
- 7Stock repurchase program and quarterly dividends were suspended in response to the pandemic's economic impact.