How did Ross Stores perform financially in the third quarter of fiscal year 2021 compared to previous periods?

Ross Stores demonstrated strong performance in the third quarter of fiscal 2021. Sales increased by 21.8% year-over-year to $4.57 billion and were also higher than the pre-pandemic third quarter of fiscal 2019. Net earnings saw a substantial increase to $385.0 million ($1.09 per diluted share) from $131.2 million ($0.37 per diluted share) in the prior year, reflecting a robust recovery and growth.

What are the key drivers behind the improved sales performance?

The improved sales performance is attributed to several factors, including the continued favorable consumer response to their off-price model, strong execution of merchandising strategies, increased comparable store sales growth (14.0% vs. FY2019), the benefit from government stimulus payments (though waning), increasing vaccination rates, and the easing of COVID-19 restrictions. The opening of new stores also contributed to sales growth.

What challenges did Ross Stores face, and how did they manage them?

The company faced challenges including higher freight costs (approximately 125 basis points impact) and ongoing industry-wide supply chain congestion. They managed these pressures through effective cost control, leveraging occupancy costs, and optimizing distribution expenses, while also seeing some offset from improved merchandise margin in certain periods. Despite these headwinds, the company maintained healthy profit margins.

What is the company's outlook and capital allocation strategy?

Ross Stores is optimistic about its future prospects and plans to return to its historical new store opening program of approximately 100 stores annually in fiscal 2022. They are actively repurchasing shares under a new $1.5 billion program and have resumed quarterly cash dividends. The company's strong operating cash flow provides the liquidity needed for ongoing operations, capital expenditures, debt repayment, and shareholder returns.

ROST 10-Q Quarterly Report Q3 FY2022 — Revenue, Net Income, EPS

Summary

Ross Stores, Inc. reported strong financial results for the third quarter and first nine months of fiscal year 2021, demonstrating a significant recovery from the prior year's pandemic-induced disruptions. Sales and earnings have surpassed pre-pandemic levels from fiscal year 2019, driven by effective merchandising strategies, increased comparable store sales, and the expansion of their store base. The company effectively navigated increased freight costs and supply chain pressures, maintaining healthy margins. Looking ahead, Ross Stores remains optimistic, planning for a return to its historical new store opening pace. While acknowledging ongoing uncertainties related to the COVID-19 pandemic and supply chain congestion, the company's strong sales performance, robust cash flow, and disciplined capital allocation, including share repurchases and dividends, position it well for continued growth. Investors can take comfort in the company's ability to generate strong earnings and manage costs effectively in a dynamic retail environment.

Financial Highlights

49 data points

Beta

Revenue

$4.57B

0.3% Gross Margin

Net Income

$385.03M

0.1% Net Margin

EPS (Diluted)

$1.09

Total Assets

$13.92B

Cash & Equivalents

$5.26B

Free Cash Flow

$34.78M

Financial Statements

Beta

Revenue	$4.57B
Cost of Revenue	$3.33B
Gross Profit	$1.25B
SG&A Expenses	$725.76M
Operating Expenses	$4.07B
Net Income	$385.03M
EPS (Basic)	$1.10
EPS (Diluted)	$1.09
Shares Outstanding (Basic)	351.07M
Shares Outstanding (Diluted)	353.08M

Key Highlights

1Sales for the third quarter of fiscal 2021 increased by 21.8% to $4.57 billion compared to the same period in fiscal 2020, and by 18.8% compared to fiscal 2019, indicating a strong rebound and growth beyond pre-pandemic levels.
2Net earnings for the third quarter of fiscal 2021 were $385.0 million, or $1.09 per diluted share, a significant improvement from $131.2 million, or $0.37 per diluted share, in the prior year's quarter.
3Comparable store sales grew 14.0% in the third quarter of fiscal 2021 compared to the same period in fiscal 2019, showcasing strong customer demand and effective merchandising.
4The company reported $1.5 billion in net cash provided by operating activities for the first nine months of fiscal 2021, highlighting strong operational performance and cash generation capabilities.
5Ross Stores plans to open approximately 100 new stores in fiscal year 2022, returning to its historical expansion pace.
6Despite higher freight costs (approximately 125 basis points) and supply chain pressures, the company managed cost of goods sold and selling, general, and administrative expenses effectively relative to sales.
7The company resumed its quarterly cash dividend of $0.285 per share and actively engaged in share repurchases, returning capital to shareholders.

ROSS STORES, INC. Quarterly Report for Q3 Ended Oct 30, 2021

Summary

Financial Highlights

Key Highlights

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