Summary
Ross Stores, Inc. reported third-quarter results for the period ending October 29, 2022. Sales remained relatively flat year-over-year, while comparable store sales saw a 3% decline, attributed to inflationary pressures impacting consumers and a promotional retail environment. Net earnings decreased, resulting in diluted earnings per share of $1.00, down from $1.09 in the prior year's quarter. The company experienced increased cost of goods sold due to higher distribution and freight costs, alongside higher markdowns. Despite these challenges, Ross Stores continues its expansion strategy, with 95 net new stores opened year-to-date, and maintained a strong liquidity position with approximately $3.9 billion in unrestricted cash and $1.3 billion available under its credit facility. For the nine-month period, sales were down 3.0%, and comparable store sales declined 5%, reflecting the same macroeconomic headwinds. Net earnings and diluted EPS also saw a significant decrease compared to the prior year. The company is actively managing its inventory and costs, with plans to continue investing in its supply chain and new store openings. Management anticipates continued impacts from inflation and a challenging retail environment.
Financial Highlights
47 data points| Revenue | $4.57B |
| Cost of Revenue | $3.42B |
| Gross Profit | $1.14B |
| SG&A Expenses | $693.37M |
| Operating Expenses | $4.11B |
| Net Income | $342.04M |
| EPS (Basic) | $1.00 |
| EPS (Diluted) | $1.00 |
| Shares Outstanding (Basic) | 342.12M |
| Shares Outstanding (Diluted) | 343.72M |
Key Highlights
- 1Comparable store sales decreased by 3% for the three months ended October 29, 2022, compared to a 14% increase in the prior year period, signaling a slowdown in consumer spending.
- 2Net earnings for the third quarter decreased to $342.0 million ($1.00 per diluted share) from $385.0 million ($1.09 per diluted share) in the prior year's comparable period.
- 3Cost of goods sold as a percentage of sales increased by 230 basis points in the third quarter due to higher markdowns and increased distribution expenses.
- 4The company opened 95 net new stores year-to-date, increasing its total store count to 2,019, indicating continued strategic expansion.
- 5Operating cash flow for the nine months decreased significantly to $472.7 million from $1.5 billion in the prior year, primarily due to lower accounts payable leverage and a decrease in net earnings.
- 6Ross Stores maintains a strong liquidity position with $3.9 billion in unrestricted cash and $1.3 billion available under its revolving credit facility, providing financial flexibility.
- 7The company is executing a robust stock repurchase program, buying back approximately $718.7 million of common stock in the first nine months of fiscal 2022.