Provides Second Half and Updated Fiscal 2024
Guidance
Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per
share for the 13 weeks ended August 3, 2024 of $1.59 on net income
of $527 million. These results compare to earnings per share of
$1.32 on net income of $446 million for the 13 weeks ended July 29,
2023. Total sales for the 2024 second quarter increased 7% to $5.3
billion, up from $4.9 billion for the same period in 2023, with
comparable store sales up 4% versus last year.
For the six months ended August 3, 2024, earnings per share were
$3.05 on net income of $1.0 billion. These results compare to
earnings per share of $2.41 on net earnings of $818 million in the
first half of 2023. Sales for the first six months of 2024 grew to
$10.1 billion, up from $9.4 billion in the prior year. Comparable
store sales for the first half of 2024 were up 3%.
Barbara Rentler, Chief Executive Officer, commented, “Second
quarter sales and earnings were above our expectations as our
stronger value offerings resonated with our customers. Operating
margin increased 115 basis points to 12.5% compared to the prior
year period. Our improved profitability relative to last year
benefited from higher sales, and lower distribution and incentive
costs that were partially offset, as expected, by lower merchandise
margins.”
During the second quarter of fiscal 2024, a total of 1.8 million
shares of common stock were repurchased for an aggregate price of
$262 million. As a result, the Company remains on track to buy back
a total of $1.05 billion in common stock during fiscal 2024 under
the Company’s two-year $2.1 billion authorization approved by its
Board of Directors in March of this year.
Second Half and Updated Fiscal 2024
Guidance
Looking ahead, Ms. Rentler commented, “Our low-to-moderate
income customers continue to face persistently high costs on
necessities, pressuring their discretionary spending. In addition,
our prior year sales comparisons become more challenging during the
second half of the year amidst an external environment that is
uncertain and volatile. As such, we continue to maintain a cautious
approach to forecasting our sales.”
Ms. Rentler continued, “For both the third and fourth quarters,
we are planning comparable sales growth of 2% to 3% on top of 5%
and 7% gains, respectively, in 2023. If the second half of 2024
performs in line with these sales projections, earnings per share
for the third quarter are projected to be $1.35 to $1.41 versus
$1.33 last year and $1.60 to $1.67 for the fourth quarter, compared
to $1.82 in 2023. This updated earnings guidance now reflects
additional efficiencies we expect to achieve in the second half of
2024.”
Ms. Rentler added, “Based on our first half results and second
half guidance, earnings per share for the 52 weeks ending February
1, 2025 are now planned to be in the range of $6.00 to $6.13 versus
$5.56 last year. As a reminder, both the 2023 fourth quarter and
full year results included an approximate $0.20 earnings per share
benefit from the 53rd week.”
Ms. Rentler concluded, “Delivering the great values that our
off-price customers have come to expect from us is more important
than ever, especially given the continued pressures they face from
the high costs on necessities. Thus, to maximize our prospects for
ongoing market share gains, we will stay laser-focused on providing
our shoppers the most quality branded bargains available in the
marketplace.”
The Company will host a conference call on Thursday, August 22,
2024 at 4:15 p.m. Eastern time to provide additional details
concerning its second quarter results and management’s outlook for
the second half and fiscal year 2024. A real-time audio webcast of
the conference call will be available in the Investors section of
the Company’s website, located at www.rossstores.com. An audio
playback will be available at 201-612-7415, PIN #13748197 until
8:00 p.m. Eastern time on August 29, 2024, as well as on the
Company’s website.
Forward-Looking Statements:
This press release and the related conference call remarks contain
forward-looking statements regarding, without limitation, projected
sales, costs, and earnings, planned new store growth, capital
expenditures, and other matters. These forward-looking statements
reflect our then-current beliefs, plans, and estimates with respect
to future events and our projected financial performance and
operations, and they are subject to risks and uncertainties which
could cause our actual results to differ materially from
management’s current expectations. The words “plan,” “expect,”
“target,” “anticipate,” “estimate,” “believe,” “forecast,”
“projected,” “guidance,” “outlook,” “looking ahead,” and similar
expressions identify forward-looking statements. Risk factors for
Ross Dress for Less® (“Ross”) and dd’s DISCOUNTS® include without
limitation, uncertainties arising from the macroeconomic
environment, including inflation, high interest rates, housing
costs, energy and fuel costs, financial and credit market
conditions, recession concerns, geopolitical conditions, and public
health and public safety issues that affect consumer confidence,
consumer disposable income, and shopping behavior, as well as our
costs; unexpected changes in the level of consumer spending on, or
preferences for, apparel and home-related merchandise, which could
adversely affect us; competitive pressures in the apparel and
home-related merchandise retailing industry; our need to
effectively manage our inventories, markdowns, and inventory
shortage in order to achieve our planned gross margins; risks
associated with importing and selling merchandise produced in other
countries, including risks from supply chain disruption, shipping
delays, and higher than expected ocean freight costs; unseasonable
weather or extreme temperatures that may affect shopping patterns
and consumer demand for seasonal apparel and other merchandise; our
dependence on the market availability, quantity, and quality of
attractive brand name merchandise at desirable discounts, and on
the ability of our buyers to anticipate consumer preferences and to
purchase merchandise to enable us to offer customers a wide
assortment of merchandise at competitive prices; information or
data security breaches, including cyber-attacks on our transaction
processing and computer information systems, which could disrupt
our operations, and result in theft or unauthorized disclosure of
confidential and valuable business information, such as customer,
credit card, employee, or other private and valuable information
that we handle in the ordinary course of our business; disruptions
in our supply chain or in our information systems, including from
ransomware or other cyber-attacks, that could impact our ability to
process sales and to deliver product to our stores in a timely and
cost-effective manner; our need to obtain acceptable new store
sites with favorable consumer demographics to achieve our planned
store openings; our need to expand in existing markets and enter
new geographic markets in order to achieve planned growth and
market penetration; consumer problems or legal issues involving the
quality, safety, or authenticity of products we sell, which could
harm our reputation, result in lost sales, and/or increase our
costs; an adverse outcome in various legal, regulatory, or tax
matters, or the adoption of new federal or state tax legislation
that increases tax rates or adds new taxes, that could increase our
costs; damage to our corporate reputation or brands that could
adversely affect our sales and operating results; our need to
continually attract, train, and retain associates with the retail
talent necessary to execute our off-price retail strategies; our
need to effectively advertise and market our business; changes in
U.S. tax, tariff, or trade policy regarding apparel and
home-related merchandise produced in other countries, which could
adversely affect our business; possible volatility in our revenues
and earnings; a public health or public safety crisis, or a natural
or man-made disaster in California or another region where we have
a concentration of stores, offices, or a distribution center, that
could harm our business; and our need to maintain sufficient
liquidity to support our continuing operations and our new store
openings. Other risk factors are set forth in our SEC filings
including the Form 10-K for fiscal 2023 and fiscal 2024 Form 8-Ks
and 10-Q on file with the SEC. The factors underlying our forecasts
and plans are dynamic and subject to change. As a result, any
forecasts or forward-looking statements speak only as of the date
they are given and do not necessarily reflect our outlook at any
other point in time. We disclaim any obligation to update or revise
these forward-looking statements.
About Ross Stores, Inc.
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100
(ROST) company headquartered in Dublin, California, with fiscal
2023 revenues of $20.4 billion. Currently, the Company operates
Ross Dress for Less® (“Ross”), the largest off-price apparel and
home fashion chain in the United States with 1,795 locations in 43
states, the District of Columbia, and Guam. Ross offers
first-quality, in-season, name brand and designer apparel,
accessories, footwear, and home fashions for the entire family at
savings of 20% to 60% off department and specialty store regular
prices every day. The Company also operates 353 dd’s DISCOUNTS®
stores in 22 states that feature a more moderately-priced
assortment of first-quality, in-season, name brand apparel,
accessories, footwear, and home fashions for the entire family at
savings of 20% to 70% off moderate department and discount store
regular prices every day. Additional information is available at
www.rossstores.com.
Ross Stores, Inc. Condensed Consolidated
Statements of Earnings Three Months Ended
Six Months Ended ($000, except stores and per share data,
unaudited)
August 3, 2024 July 29, 2023
August 3,
2024 July 29, 2023
Sales
$
5,287,519
$
4,934,905
$
10,145,586
$
9,429,591
Costs and Expenses Cost of goods sold
3,791,929
3,569,367
7,282,601
6,861,973
Selling, general and administrative
836,357
807,898
1,612,639
1,554,120
Interest income, net
(43,350
)
(37,214
)
(89,300
)
(68,611
)
Total costs and expenses
4,584,936
4,340,051
8,805,940
8,347,482
Earnings before taxes
702,583
594,854
1,339,646
1,082,109
Provision for taxes on earnings
175,435
148,535
324,508
264,599
Net earnings
$
527,148
$
446,319
$
1,015,138
$
817,510
Earnings per share Basic
$
1.60
$
1.33
$
3.07
$
2.42
Diluted
$
1.59
$
1.32
$
3.05
$
2.41
Weighted-average shares outstanding (000)
Basic
329,392
336,231
330,325
337,140
Diluted
331,511
337,932
332,620
339,003
Store count at end of period
2,148
2,061
2,148
2,061
Ross Stores, Inc.
Condensed Consolidated Balance
Sheets
($000, unaudited)
August 3, 2024 July 29, 2023
Assets Current Assets Cash and cash
equivalents
$
4,668,137
$
4,583,606
Accounts receivable
181,918
175,410
Merchandise inventory
2,490,558
2,300,063
Prepaid expenses and other
254,370
214,673
Total current assets
7,594,983
7,273,752
Property and equipment, net
3,583,535
3,310,605
Operating lease assets
3,234,180
3,164,685
Other long-term assets
265,323
238,260
Total assets
$
14,678,021
$
13,987,302
Liabilities and Stockholders’ Equity
Current Liabilities Accounts payable
$
2,217,227
$
2,150,999
Accrued expenses and other
639,703
689,866
Current operating lease liabilities
691,036
668,028
Accrued payroll and benefits
353,980
435,300
Income taxes payable
23,266
25,449
Current portion of long-term debt
949,028
—
Total current liabilities
4,874,240
3,969,642
Long-term debt
1,513,826
2,458,615
Non-current operating lease liabilities
2,710,239
2,653,632
Other long-term liabilities
254,487
231,945
Deferred income taxes
194,697
218,726
Commitments and contingencies
Stockholders’
Equity
5,130,532
4,454,742
Total liabilities and stockholders’ equity
$
14,678,021
$
13,987,302
Ross Stores, Inc. Condensed Consolidated
Statements of Cash Flows Six Months Ended
($000, unaudited)
August 3, 2024 July 29, 2023
Cash Flows
From Operating Activities Net earnings
$
1,015,138
$
817,510
Adjustments to reconcile net earnings to net cash provided
by operating activities: Depreciation and amortization
217,781
197,924
Stock-based compensation
78,468
72,492
Deferred income taxes
(1,541
)
1,667
Change in assets and liabilities: Merchandise inventory
(298,338
)
(276,568
)
Other current assets
(81,363
)
(60,431
)
Accounts payable
271,582
144,775
Other current liabilities
(197,585
)
235,490
Income taxes
(46,708
)
(24,152
)
Operating lease assets and liabilities, net
6,962
5,172
Other long-term, net
(3,354
)
2,402
Net cash provided by operating activities
961,042
1,116,281
Cash Flows From Investing Activities Additions to
property and equipment
(333,735
)
(363,459
)
Net cash used in investing activities
(333,735
)
(363,459
)
Cash Flows From Financing Activities Issuance of
common stock related to stock plans
12,418
12,358
Treasury stock purchased
(71,728
)
(38,435
)
Repurchase of common stock
(524,979
)
(464,890
)
Dividends paid
(245,751
)
(228,799
)
Net cash used in financing activities
(830,040
)
(719,766
)
Net (decrease) increase in cash, cash equivalents, and
restricted cash and cash equivalents
(202,733
)
33,056
Cash, cash equivalents, and restricted cash and cash
equivalents: Beginning of period
4,935,441
4,612,241
End of period
$
4,732,708
$
4,645,297
Reconciliations: Cash and cash equivalents
$
4,668,137
$
4,583,606
Restricted cash and cash equivalents included in prepaid expenses
and other
14,851
12,955
Restricted cash and cash equivalents included in other long-term
assets
49,720
48,736
Total cash, cash equivalents, and restricted cash and cash
equivalents:
$
4,732,708
$
4,645,297
Supplemental Cash Flow Disclosures Interest paid
$
40,158
$
40,158
Income taxes paid, net
$
372,756
$
287,084
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240822924570/en/
Adam Orvos Executive Vice President, Chief Financial Officer
(925) 965-4550
Connie Kao Group Vice President, Investor Relations (925)
965-4668 connie.kao@ros.com
Ross Stores (NASDAQ:ROST)
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