Summary
Ross Stores, Inc. (ROST) reported its Q3 2020 results on December 9, 2020, for the period ending October 30, 2020. The company experienced a significant sales decline of 28.8% for the first nine months of fiscal 2020 compared to the prior year, primarily due to the impact of COVID-19 related store closures and reduced customer demand. While the third quarter showed some recovery with a 2.5% sales decrease and a 3% decline in comparable store sales, the overall financial performance for the nine-month period resulted in a net loss of $152.6 million, a sharp contrast to the strong net earnings of $1.2 billion in the prior year. Despite the challenging operating environment, Ross Stores focused on financial flexibility. The company significantly strengthened its liquidity position, ending the quarter with over $5.2 billion in liquidity, including $4.4 billion in unrestricted cash. This was supported by strategic debt management, including issuing $2.0 billion in senior notes in April 2020 and refinancing $775 million of higher-interest debt with $1.0 billion in lower-interest notes in the third quarter. The company also suspended its stock repurchase program and dividends to preserve capital. Management expects the pandemic's adverse effects to continue, but believes its liquidity and strategic actions provide a stable footing.
Financial Highlights
49 data points| Revenue | $3.75B |
| Cost of Revenue | $2.71B |
| Gross Profit | $1.04B |
| SG&A Expenses | $877.86M |
| Operating Expenses | $3.62B |
| Net Income | $131.20M |
| EPS (Basic) | $0.37 |
| EPS (Diluted) | $0.37 |
| Shares Outstanding (Basic) | 352.48M |
| Shares Outstanding (Diluted) | 354.46M |
Key Highlights
- 1Total sales for the nine months ended October 31, 2020, decreased by 28.8% to $8.3 billion from $11.6 billion in the prior year, largely due to COVID-19 impacts.
- 2The company reported a net loss of $152.6 million for the nine months ended October 31, 2020, compared to a net earning of $1.2 billion in the same period last year.
- 3Quarterly sales for the three months ended October 31, 2020, saw a smaller decline of 2.5% ($3.8 billion vs $3.7 billion), with comparable store sales down 3%.
- 4Ross Stores significantly bolstered its liquidity, ending the quarter with $5.2 billion in total liquidity, including $4.4 billion in unrestricted cash.
- 5The company undertook substantial debt refinancing activities, including issuing $2.0 billion in senior notes and later refinancing $775 million at a lower interest rate, ultimately repaying $800 million from its revolving credit facility.
- 6Stock repurchase programs and quarterly dividends were suspended in response to the pandemic to conserve cash.
- 7Store count increased to 1,869 locations at the end of the period, up from 1,810 in the prior year, with 39 new stores opened in the third quarter.