01—Abstract
Summary
Summary of the 10-Q filed December 6, 2023. Cited figures are marked; the original filing is the authoritative source.
Ross Stores, Inc. reported a strong third quarter for fiscal year 2023, with a significant increase in sales and net earnings compared to the prior year period.
Sales grew by 7.9% driven by a 5% comparable store sales increase and the addition of new locations. This top-line growth translated into a substantial improvement in profitability, with net earnings per diluted share rising to $1.33a from $1.00 in the same quarter last year. The company also demonstrated robust operating cash flow, underscoring its financial strength and ability to fund growth initiatives, shareholder returns, and debt obligations.
02—Key points
Key Highlights
- Sales increased by 7.9% to $4.92 billion for the third quarter, with comparable store sales growing by 5%.
- Net earnings for the quarter rose by 30.7% to $447.3 million, or $1.33 per diluted share, compared to $1.00 in the prior year quarter.
- The company opened 97 new locations in the first nine months of fiscal 2023, expanding its store base.
- Cost of goods sold as a percentage of sales decreased by 260 basis points, primarily due to improved merchandise margin driven by lower freight costs.
- Selling, general and administrative (SG&A) expenses as a percentage of sales increased by 125 basis points, mainly due to higher incentive compensation and store wages.
- Net cash provided by operating activities for the nine-month period was a strong $1.6 billion, indicating healthy cash generation.
- The company continued its capital allocation strategy by repurchasing $703.4 million of common stock and paying $342.1 million in dividends during the first nine months of fiscal 2023.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed December 6, 2023Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $4.92B$4.57B | +7.9% |
| Cost of Revenue | $3.56B$3.42B | +4.1% |
| Gross Profit | $1.36B$1.14B | +19.2% |
| SG&A Expenses | $810.47M$693.37M | +16.9% |
| Operating Expenses | $4.33B$4.11B | +5.3% |
| Net Income | $447.33M$342.04M | +30.8% |
| EPS (Basic) | $1.34$1.00 | +34.0% |
| EPS (Diluted) | $1.33$1.00 | +33.0% |
| Shares Outstanding (Basic) | 334.28M342.12M | −2.3% |
| Shares Outstanding (Diluted) | 336.26M343.72M | −2.2% |
05—Questions
Frequently Asked Questions
How did Ross Stores' sales perform in the third quarter of fiscal 2023?
Ross Stores reported a 7.9% increase in sales, reaching $4.92 billion for the third quarter ended October 28, 2023. This growth was supported by a 5% increase in comparable store sales and the addition of new stores.
What was the profitability performance for the quarter?
Profitability improved significantly, with net earnings increasing by 30.7% to $447.3 million. Diluted earnings per share rose to $1.33 from $1.00 in the comparable prior-year quarter. This improvement was driven by higher sales and better cost management, particularly in the cost of goods sold.
How is the company managing its expenses?
While the cost of goods sold as a percentage of sales decreased due to factors like lower freight costs, selling, general, and administrative (SG&A) expenses as a percentage of sales increased. This increase was primarily attributed to higher incentive compensation and store wages, reflecting investments in employees and operational costs.
What is the company's cash flow situation?
Ross Stores generated robust operating cash flow, with $1.6 billion provided by operating activities in the first nine months of fiscal 2023. The company also maintained a strong liquidity position with $4.5 billion in unrestricted cash and cash equivalents at the end of the quarter.
06—Continue