10-QPeriod: Q1 FY2024

ROSS STORES, INC. Quarterly Report for Q1 Ended Apr 29, 2023

Filed June 7, 2023For Securities:ROST

Summary

Ross Stores, Inc. reported solid results for the first quarter of fiscal 2023, with sales increasing by 3.7% to $4.5 billion and comparable store sales showing a 1% increase. Net earnings rose by 9.7% to $371.2 million, resulting in diluted earnings per share of $1.09, up from $0.97 in the prior year. This performance demonstrates the company's ability to navigate a challenging macroeconomic environment, characterized by inflationary pressures impacting consumer discretionary spending, by offering compelling value to its off-price customer base. The company continued its strategic expansion, opening 19 new stores in the quarter and maintaining a positive outlook for new store growth throughout the year. Despite ongoing economic uncertainties, Ross Stores reinforced its financial strength with strong operating cash flow and a substantial cash balance of $4.4 billion. The company also continued its commitment to shareholder returns through consistent dividend payments and active stock repurchases, underscoring a focus on both growth and capital return.

Financial Highlights

47 data points
Beta

Revenue

$4.49B

26.7% Gross Margin

Net Income

$371.19M

8.3% Net Margin

EPS (Diluted)

$1.09

Total Assets

$13.62B

Cash & Equivalents

$4.48B

Free Cash Flow

$245.90M

Financial Statements
Beta
Revenue$4.49B
Cost of Revenue$3.29B
Gross Profit$1.20B
SG&A Expenses$746.22M
Operating Expenses$4.01B
Net Income$371.19M
EPS (Basic)$1.10
EPS (Diluted)$1.09
Shares Outstanding (Basic)338.05M
Shares Outstanding (Diluted)340.04M

Key Highlights

  • 1Sales increased by 3.7% year-over-year to $4.5 billion.
  • 2Comparable store sales increased by 1%.
  • 3Net earnings grew by 9.7% to $371.2 million.
  • 4Diluted earnings per share rose to $1.09 from $0.97 in the prior year.
  • 5The company opened 19 new stores in the quarter and plans to open approximately 100 new stores in fiscal 2023.
  • 6Operating cash flow was strong at $413.2 million, and the company maintained a healthy cash position of $4.4 billion.
  • 7The company repurchased $234.5 million of common stock and paid $114.8 million in dividends during the quarter.

Frequently Asked Questions

Ross Stores reported a 3.7% increase in sales to $4.5 billion and a 1% increase in comparable store sales for the first quarter of fiscal 2023. Net earnings increased by 9.7% to $371.2 million, resulting in diluted earnings per share of $1.09, up from $0.97 in the same period last year.

The company opened 19 new stores in the first quarter of fiscal 2023 and plans to open approximately 100 new stores throughout the year. This reflects their ongoing strategy to expand their store footprint.

Ross Stores is managing its inventory and costs by focusing on offering value to consumers amidst inflationary pressures. The cost of goods sold as a percentage of sales decreased due to lower freight costs and improved merchandise margin. The company also noted lower distribution costs, although some expenses like buying costs and incentive compensation increased.

The company ended the first quarter with a strong cash and cash equivalents balance of $4.4 billion. Ross Stores continues to return capital to shareholders through a combination of regular dividend payments ($114.8 million paid in the quarter) and significant share repurchases ($234.5 million repurchased in the quarter), as part of its $1.9 billion stock repurchase program.