Ross Stores Reports Third Quarter Results, Provides Fourth Quarter Guidance
11/18/2021 - 04:01 PM
DUBLIN, Calif. --(BUSINESS WIRE)--
Ross Stores, Inc. (NASDAQ: ROST) today reported earnings per share for the third quarter ended October 30, 2021 of $1.09 on net income of $385 million $1.03 per share on net earnings of $371 million November 2, 2019 . Sales rose 19% to $4.6 billion 14% .
For the nine months ended October 30, 2021 , earnings per share were $3.82 on net earnings of $1.4 billion $3.32 per share on net income of $1.2 billion 20% to $13.9 billion 14% .
Barbara Rentler , Chief Executive Officer, commented, “Third quarter sales and profitability significantly exceeded our expectations as consumers continued to respond favorably to our broad assortment of great bargains. We achieved these results despite waning government stimulus and uncertainty related to the spread of COVID variants. Operating margin of 11.4% was better than plan, though down from 2019 as leverage from the robust sales gains was partially offset by ongoing headwinds from higher freight, wage, and COVID-related costs.”
Ms. Rentler continued, “During the third quarter and first nine months of fiscal 2021, we repurchased 2.1 million and 3.5 million shares of common stock, respectively, for an aggregate cost of $241 million $417 million $650 million
Looking ahead, Ms. Rentler said, “While we are encouraged by the ongoing strength of consumer demand, there remains significant uncertainty related to the worsening industry-wide supply chain congestion as we enter the important holiday season. As a result, and while we hope to do better, we are projecting fourth quarter comparable store sales gains of 7% to 9% and earnings per share in the range of $0.83 to $0.93 .”
Ms. Rentler added, “Based on our year-to-date results and our updated fourth quarter guidance, we are now planning earnings per share for fiscal 2021 to be in the range of $4.65 to $4.75 on a comparable store sales gain of 12% to 13% .”
Ms. Rentler concluded, “Moving forward, consumers’ increasing focus on value and convenience along with the large number of recent retail closures and bankruptcies make us confident about our prospects for continued market share gains in the future.”
The Company will host a conference call on Thursday, November 18, 2021 , at 4:15 p.m. Eastern time to provide additional details concerning its third quarter results and management’s outlook for the remainder of the year. 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 404-537-3406, PIN #9489421 until 8:00 p.m. Eastern time on November 26, 2021 , as well as on the Company’s website.
Forward-Looking Statements: This press release and the related conference call remarks contains forward-looking statements regarding projected sales and earnings, planned new store growth, and other financial results and market conditions in future periods that 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, the uncertainties and potential for the recurrence of significant business disruptions arising from the COVID-19 pandemic; changes in the level of consumer spending on or preferences for apparel and home-related merchandise; impacts from the macro-economic environment, financial and credit markets, geopolitical conditions, unemployment levels or public health issues (such as pandemics) that affect consumer confidence and consumer disposable income; our need to effectively manage our inventories, markdowns, and inventory shortage to achieve planned gross margins; competitive pressures in the apparel or home-related merchandise retailing industry; issues associated with importing and selling merchandise produced in other countries, including risks from supply chain disruptions due to port of exit/entry congestion, shipping delays and ocean freight cost increases, and risks from other supply chain related disruptions, including those due to COVID-19 closures; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and that may result in temporary store closures and disruptions in deliveries of merchandise to our stores; market availability, quantity, and quality of attractive brand name merchandise at desirable discounts and our buyers’ ability to purchase merchandise that enables us to offer customers a wide assortment of merchandise at competitive prices; potential data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could result in theft or unauthorized disclosure of customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business; potential disruptions in our supply chain or information systems; 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, could increase our costs; damage to our corporate reputation or brands; our need to continually attract, train, and retain associates to execute our off-price 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 that could adversely affect our business; volatility in revenues and earnings; an additional pandemic, natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center; unexpected issues or costs from expanding in existing markets and entering new geographic markets; obtaining acceptable new store sites with favorable consumer demographics; and maintaining sufficient liquidity to support our continuing operations, new store openings and reopenings, and ongoing capital expenditure plans. Other risk factors are set forth in our SEC filings including without limitation, the Form 10-K for fiscal 2020, and fiscal 2021 Form 10-Qs and Form 8-Ks on file with the SEC . The factors underlying our forecasts are dynamic and subject to change. As a result, our forecasts speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We do not undertake to update or revise these forward-looking statements.
Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California , with fiscal 2020 revenues of $12.5 billion Ross Dress for Less ® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,629 locations in 40 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 295 dd’s DISCOUNTS® stores in 21 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 Operations
Three Months Ended Nine Months Ended
($000 , except stores and per share data, unaudited)
October 30, 2021 October 31, 2020 November 2, 2019 October 30, 2021 October 31, 2020 November 2, 2019
Sales
$ 4,574,541
$ 3,754,509
$ 3,849,117
$13,895,595
$ 8,281,894
$11,625,628
Costs and Expenses
Cost of goods sold
3,326,004
2,711,419
2,766,432
9,935,271
6,681,530
8,311,950
Selling, general and administrative
725,761
877,857
604,605
2,118,602
1,812,657
1,754,825
Interest expense (income), net
18,744
28,740
(4,402)
56,500
64,261
(14,819)
Total costs and expenses
4,070,509
3,618,016
3,366,635
12,110,373
8,558,448
10,051,956
Earnings (loss) before taxes
504,032
136,493
482,482
1,785,222
(276,554)
1,573,672
Provision (benefit) for taxes on earnings (loss)
119,002
5,296
111,550
429,455
(123,956)
368,877
Net earnings (loss)
$ 385,030
$ 131,197
$ 370,932
$ 1,355,767
$ (152,598)
$ 1,204,795
Earnings (loss) per share
Basic
$ 1.10
$ 0.37
$ 1.04
$ 3.85
$ (0.43)
$ 3.35
Diluted
$ 1.09
$ 0.37
$ 1.03
$ 3.82
$ (0.43)
$ 3.32
Weighted-average shares outstanding (000)
Basic
351,071
352,481
356,879
352,308
352,320
359,919
Diluted
353,081
354,457
359,299
354,477
352,320
362,455
Store count at end of period
1,924
1,869
1,810
1,924
1,869
1,810
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000 , unaudited)
October 30, 2021 October 31, 2020 November 2, 2019
Assets
Current Assets
Cash and cash equivalents
$ 5,259,595
$ 4,416,124
$ 1,142,709
Accounts receivable
158,765
122,654
124,853
Merchandise inventory
2,231,242
1,630,390
2,168,796
Prepaid expenses and other
195,309
347,399
170,304
Total current assets
7,844,911
6,516,567
3,606,662
Property and equipment, net
2,784,286
2,706,884
2,565,882
Operating lease assets
3,032,175
3,132,056
3,042,298
Other long-term assets
254,362
215,159
200,999
Total assets
$ 13,915,734
$ 12,570,666
$ 9,415,841
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable
$ 2,652,881
$ 2,426,390
$ 1,480,205
Accrued expenses and other
625,426
655,408
496,623
Current operating lease liabilities
620,675
590,122
559,433
Accrued payroll and benefits
512,336
269,709
321,977
Current portion of long-term debt
64,991
-
-
Total current liabilities
4,476,309
3,941,629
2,858,238
Long-term debt
2,451,283
2,512,037
312,778
Non-current operating lease liabilities
2,551,162
2,672,139
2,601,372
Other long-term liabilities
296,819
290,795
225,934
Deferred income taxes
156,944
135,029
140,740
Commitments and contingencies
Stockholders’ Equity
3,983,217
3,019,037
3,276,779
Total liabilities and stockholders’ equity
$ 13,915,734
$ 12,570,666
$ 9,415,841
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended
($000 , unaudited)
October 30, 2021 October 31, 2020 November 2, 2019
Cash Flows From Operating Activities
Net earnings (loss)
$ 1,355,767
$ (152,598)
$ 1,204,795
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization
262,139
268,193
255,089
Loss on early extinguishment of debt
-
239,769
-
Stock-based compensation
96,775
74,267
70,600
Deferred income taxes
35,077
(14,650)
23,070
Change in assets and liabilities:
Merchandise inventory
(722,260)
201,949
(418,354)
Other current assets
(50,139)
(31,732)
(46,161)
Accounts payable
422,277
1,126,574
305,648
Other current liabilities
160,984
118,679
43,968
Income taxes
(60,442)
(119,513)
(42,619)
Operating lease assets and liabilities, net
4,767
8,979
12,911
Other long-term, net
(1,292)
63,206
1,983
Net cash provided by operating activities
1,503,653
1,783,123
1,410,930
Cash Flows From Investing Activities
Additions to property and equipment
(377,916)
(339,545)
(401,251)
Proceeds from investments
-
-
517
Net cash used in investing activities
(377,916)
(339,545)
(400,734)
Cash Flows From Financing Activities
Issuance of common stock related to stock plans
18,626
17,088
16,451
Treasury stock purchased
(57,092)
(45,091)
(56,920)
Repurchase of common stock
(416,979)
(132,467)
(965,909)
Dividends paid
(304,520)
(101,411)
(278,370)
Net proceeds from issuance of short-term debt
-
805,601
-
Payments of short-term debt
-
(804,972)
-
Net proceeds from issuance of long-term debt
-
2,965,115
-
Payments of long-term debt
-
(775,009)
-
Payments of debt extinguishment and debt issuance costs
-
(232,000)
-
Net cash (used in) provided by financing activities
(759,965)
1,696,854
(1,284,748)
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents
365,772
3,140,432
(274,552)
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period
4,953,769
1,411,410
1,478,079
End of period
$ 5,319,541
$ 4,551,842
$ 1,203,527
Reconciliations:
Cash and cash equivalents
$ 5,259,595
$ 4,416,124
$ 1,142,709
Restricted cash and cash equivalents included in prepaid expenses and other
10,790
85,322
10,947
Restricted cash and cash equivalents included in other long-term assets
49,156
50,396
49,871
Total cash, cash equivalents, and restricted cash and cash equivalents:
$ 5,319,541
$ 4,551,842
$ 1,203,527
Supplemental Cash Flow Disclosures
Interest paid
$ 82,209
$ 70,347
$ 10,560
Income taxes paid
$ 454,821
$ 10,207
$ 388,426
View source version on businesswire.com : https://www.businesswire.com/news/home/20211118006274/en/
Adam Orvos
Connie Kao
connie.kao@ros.com
Source: Ross Stores, Inc.
