01—Abstract
Summary
Summary of the 10-Q filed June 7, 2023. Cited figures are marked; the original filing is the authoritative source.
Ross Stores, Inc. reported solid results for the first quarter of fiscal 2023, with sales increasing by 3.7% to $4.5 billiona and comparable store sales showing a 1% increase.
Net earnings rose by 9.7% to $371.2 millionb, 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 billionc. 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.
02—Key points
Key Highlights
- Sales increased by 3.7% year-over-year to $4.5 billion.
- Comparable store sales increased by 1%.
- Net earnings grew by 9.7% to $371.2 million.
- Diluted earnings per share rose to $1.09 from $0.97 in the prior year.
- The company opened 19 new stores in the quarter and plans to open approximately 100 new stores in fiscal 2023.
- Operating cash flow was strong at $413.2 million, and the company maintained a healthy cash position of $4.4 billion.
- The company repurchased $234.5 million of common stock and paid $114.8 million in dividends during the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed June 7, 2023Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $4.49B$4.33B | +3.7% |
| Cost of Revenue | $3.29B$3.20B | +3.0% |
| Gross Profit | $1.20B$1.14B | +5.8% |
| SG&A Expenses | $746.22M$669.50M | +11.5% |
| Operating Expenses | $4.01B$3.88B | +3.2% |
| Net Income | $371.19M$338.44M | +9.7% |
| EPS (Basic) | $1.10$0.98 | +12.2% |
| EPS (Diluted) | $1.09$0.97 | +12.4% |
| Shares Outstanding (Basic) | 338.05M347.05M | −2.6% |
| Shares Outstanding (Diluted) | 340.04M348.82M | −2.5% |
05—Questions
Frequently Asked Questions
How did Ross Stores perform in terms of sales and profitability in the first quarter of fiscal 2023?
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.
What is the company's outlook on store expansion?
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.
How is Ross Stores managing its inventory and costs in the current economic climate?
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.
What is the company's cash position and how is it returning capital to shareholders?
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.
06—Continue