Summary
Ross Stores, Inc. (ROST) reported strong financial results for the second quarter and first half of fiscal year 2021, which ended July 30, 2021. Driven by a combination of government stimulus, increasing vaccination rates, and easing COVID-19 restrictions, the company saw significant year-over-year sales growth across both its Ross Dress for Less and dd's DISCOUNTS brands. Profitability also saw a substantial rebound compared to the pandemic-impacted periods of 2020, with net earnings and earnings per share significantly improving. The company demonstrated robust operational execution, managing increased freight and distribution costs while expanding its store footprint. Despite ongoing macroeconomic uncertainties and supply chain challenges, Ross Stores maintains a positive outlook, supported by its off-price business model and strategic expansion plans. Investors should note the return of dividend payments and ongoing share repurchase programs, indicating management's confidence in the company's financial health and future prospects.
Financial Highlights
48 data points| Revenue | $4.80B |
| Cost of Revenue | $3.41B |
| Gross Profit | $1.39B |
| SG&A Expenses | $717.79M |
| Operating Expenses | $4.15B |
| Net Income | $494.26M |
| EPS (Basic) | $1.40 |
| EPS (Diluted) | $1.39 |
| Shares Outstanding (Basic) | 352.87M |
| Shares Outstanding (Diluted) | 354.94M |
Key Highlights
- 1Sales for the three months ended July 31, 2021, surged by 79.0% to $4.8 billion compared to the prior year, driven by increased store open days and favorable economic conditions.
- 2Net earnings for the three months ended July 31, 2021, were $494.3 million, a significant increase from $22.0 million in the same period last year, with diluted EPS rising to $1.39 from $0.06.
- 3The company successfully navigated expense pressures, including higher freight and distribution costs, by improving merchandise margins and leveraging occupancy costs.
- 4Ross Stores continued its store expansion, ending the period with 1,896 stores, an increase of 64 net new stores compared to the prior year.
- 5Operating cash flow for the first six months of fiscal 2021 was strong at $1.3 billion, a substantial increase from $172.4 million in the prior year, reflecting the recovery in earnings and improved working capital management.
- 6The company resumed paying quarterly cash dividends in March 2021 and authorized a new stock repurchase program of up to $1.5 billion through fiscal 2022.
- 7Management remains cautiously optimistic, acknowledging ongoing uncertainties related to the COVID-19 pandemic and supply chain disruptions, but believes its off-price model is well-positioned.