Ross Stores Reports Second Quarter Sales And Earnings, Issues Second Half 2014 Guidance

Ross Stores Reports Second Quarter Sales And Earnings, Issues Second Half 2014
                                   Guidance

PR Newswire

DUBLIN, Calif., Aug. 21, 2014

DUBLIN, Calif., Aug. 21, 2014 /PRNewswire/ --Ross Stores, Inc. (Nasdaq: ROST)
today reported that earnings per share for the 13 weeks ended August 2, 2014
rose 16% to $1.14, up from $.98 for the 13 weeks ended August 3, 2013. Net
earnings for the 2014 second quarter grew 12% to $239.6 million, up from
$213.1 million in the prior year. Second quarter 2014 sales increased 7% to
$2.730 billion, compared to $2.551 billion in the second quarter of 2013.
Comparable store sales for the 13 weeks ended August 2, 2014 grew 2% on top of
a 4% gain for the 13 weeks ended August 3, 2013.

For the six months ended August 2, 2014, earnings per share increased 12% to
$2.30, up from $2.06 for the six months ended August 3, 2013. Net earnings
for the six months ended August 2, 2014 were $483.5 million, up 8% from $447.7
million in the first half of 2013. Sales for the first six months of 2014
rose 6% to $5.410 billion on a comparable store sales gain of 2% versus a 3%
increase for the same period last year. Both the quarter and the first six
months include a one-time benefit to earnings, equivalent to approximately
$.02 per share, from the favorable resolution of an outstanding legal matter.

Barbara Rentler, Chief Executive Officer, commented, "Our second quarter sales
performed at the high-end of our expectations as today's value-focused
consumers continued to respond to our wide assortment of competitive name
brand bargains. Merchandise gross margin was above plan, which coupled with
strong expense controls, enabled us to deliver quarterly earnings per share
that were above the high end of our guidance."

Ms. Rentler continued, "Operating margin for the second quarter grew to a
record 14.3%, up from 13.6% in the prior year. This increased level of
profitability was driven by a 25 basis point improvement in cost of goods
sold, mainly due to higher merchandise gross margin, and a 45 basis point
decline in selling, general and administrative expenses which benefited from
tight expense controls and resolution of the aforementioned legal matter."

Ms. Rentler noted, "We also continue to enhance stockholder returns through
our stock repurchase and dividend programs. During the first six months of
fiscal 2014, we repurchased 4.1 million shares of common stock for an
aggregate price of $277 million. As a result, we remain on track to buy back
a total of $550 million in common stock during fiscal 2014, which would
complete the two-year $1.1 billion program authorized at the beginning of
2013."

Looking ahead, Ms. Rentler said, "For the 13 weeks ending November 1, 2014,
earnings per share are projected to be $.83 to $.87, up from $.80 in last
year's third quarter. For the 13 weeks ending January 31, 2015, earnings per
share are forecast to be in the range of $1.05 to $1.09, up from $1.02 in the
2013 fourth quarter. Earnings per share for the 52 weeks ending January 31,
2015 are now forecast to be $4.18 to $4.26, up from $3.88 for the 52 weeks
ended February 1, 2014. These guidance ranges are based on same store sales
that are projected to increase 1% to 2% for both the third and fourth quarters
of 2014."

The Company will provide additional details concerning its second quarter
results and management's outlook for the remainder of the year on a conference
call to be held on Thursday, August 21, 2014 at 4:15 p.m. Eastern time.
Participants may listen to a real-time audio webcast of the conference call by
visiting the Investors section of the Company's website located at
www.rossstores.com. A recorded version of the call will also be available at
the website address, and via a telephone recording through 8:00 p.m. Eastern
time on Thursday, August 28, 2014 at404-537-3406, ID #82563802.

Forward-Looking Statements: This press release contains forward-looking
statements regarding expected sales, earnings levels and other financial
results 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," "looking ahead" and similar
expressions identify forward-looking statements. Risk factors for Ross Dress
for Less^® ("Ross") and dd's DISCOUNTS^® include without limitation,
competitive pressures in the apparel or home-related merchandise retailing
industry; changes in the level of consumer spending on or preferences for
apparel or home-related merchandise; impacts from the macro-economic
environment and financial and credit markets that affect consumer disposable
income and consumer confidence, including but not limited tointerest rates,
recession, inflation, deflation,energy costs, tax rates and policy,
unemployment trends, and fluctuating commodity costs; changes in geopolitical
and geoeconomic conditions; unseasonable weather trends; potential disruptions
in supply chain or information systems; lower than planned gross margin,
including higher than planned markdowns and higher than expected inventory
shortage; greater than planned operating costs; our ability to continue to
purchase attractive brand name merchandise at desirable discounts; attracting
and retaining personnel with the retail talent necessary to execute our
strategies; effectively operating and continually upgrading our various supply
chain, store, core merchandising and other information systems; improving our
merchandising and transaction processing capabilities and the reliability and
security of our data communications systems through the implementation of new
processes and systems enhancements; protecting against security breaches,
including cyber-attacks on our transaction processing and computer information
systems, that could result in the theft, transfer or unauthorized disclosure
of customer, credit card, employee or other private and valuable information
that we collect and process in the ordinary course of our business, and
avoiding resulting damage to our reputation, loss of customer confidence,
exposure to litigation and regulatory action, unanticipated costs and
disruption of our operations; obtaining acceptable new store locations and
improving new store sales and profitability, especially in newer regions and
markets; adding capacity to our existing distribution centers, finding new
distribution center sites, and building out planned additional distribution
centers timely and cost effectively; and achieving and maintaining targeted
levels of productivity and efficiency in our existing and new distribution
centers. Other risk factors are set forth in our SEC filings including without
limitation, the Form 10-K for fiscal 2013 and Form 10-Q and 8-Ks for fiscal
2014. 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 2013 revenues of $10.2
billion. The Company operates Ross Dress for Less^® ("Ross"), the largest
off-price apparel and home fashion chain in the United States with 1,194
locations in 33 states, the District of Columbia and Guam as of August 2,
2014. Ross offers first-quality, in-season, name brand and designer apparel,
accessories, footwear and home fashions for the entire family at everyday
savings of 20% to 60% off department and specialty store regular prices. The
Company also operates 144 dd's DISCOUNTS^® in 13 states as of August 2, 2014
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 everyday savings of 20% to 70% off moderate department and discount
store regular prices. Additional information is available at
www.rossstores.com.

Contact: Michael Hartshorn       Connie Wong
         Senior Vice President,  Director, Investor Relations
         Chief Financial Officer (925) 965-4668
         (925) 965-4503          connie.wong@ros.com



Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
                            Three Months Ended       Six Months Ended
($000, except stores and    August 2,    August 3,    August 2,    August 3,
per share data,             2014         2013         2014         2013
unaudited)
Sales                       $          $           $          $ 
                            2,729,566    2,551,277   5,410,159    5,091,191
Costs and Expenses
   Costs of goods sold      1,944,017    1,823,777    3,852,202    3,622,588
   Selling, general and     395,225      381,193      775,027      743,161
   administrative
   Interest (income)        (95)         (175)        (200)        34
   expense, net
       Total costs and      2,339,147    2,204,795    4,627,029    4,365,783
       expenses
Earnings before taxes       390,419      346,482      783,130      725,408
Provision for taxes on      150,858      133,361      299,656      277,675
earnings
Net earnings                $         $         $         $   
                            239,561      213,121      483,474      447,733
Earnings per share
   Basic                    $       $       $       $     
                             1.15       1.00         2.32       2.09
   Diluted                  $       $       $       $     
                             1.14       0.98         2.30       2.06
Weighted average shares
outstanding (000)^
   Basic                    207,565      213,836      208,257      214,622
   Diluted                  209,653      216,613      210,607      217,570
Dividends
   Cash dividends           $       $       $       $     
   declared per share        0.20       0.17         0.40       0.17
Stores open at end of       1,338        1,253        1,338        1,253
period





Ross Stores, Inc.
Condensed Consolidated Balance Sheets
($000, unaudited)                           August 2, 2014   August 3, 2013
Assets
Current Assets
      Cash and cash equivalents             $    549,784  $    550,565
      Short-term investments                -                13
      Accounts receivable                   85,218           79,202
      Merchandise inventory                 1,258,820        1,330,536
      Prepaid expenses and other            115,953          115,025
      Deferred income taxes                 14,090           23,136
            Total current assets            2,023,865        2,098,477
Property and equipment, net                 1,979,288        1,646,457
Long-term investments                       3,660            4,215
Other long-term assets                      161,019          159,336
Total assets                                $   4,167,832  $  3,908,485
Liabilities and Stockholders' Equity
Current Liabilities
      Accounts payable                  $    967,915  $    938,059
      Accrued expenses and other            367,451          342,851
      Accrued payroll and benefits          189,585          190,904
      Income taxes payable                  7,170            -
            Total current liabilities       1,532,121        1,471,814
Long-term debt                              150,000          150,000
Other long-term liabilities                 283,584          270,776
Deferred income taxes                       52,800           84,925
Commitments and contingencies
Stockholders' Equity                        2,149,327        1,930,970
Total liabilities and stockholders' equity  $   4,167,832  $  3,908,485



Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
                                           Six Months Ended
($000, unaudited)                          August 2, 2014     August 3, 2013
Cash Flows From Operating Activities
Net earnings                               $    483,474    $    447,733
Adjustments to reconcile net earnings to
net cash
provided by operating activities:
   Depreciation and amortization           110,670            98,853
   Stock-based compensation                25,095             24,211
   Deferred income taxes                   (9,934)            (2,105)
   Tax benefit from equity issuance        24,061             22,544
   Excess tax benefit from stock-based     (23,755)           (22,123)
   compensation
   Change in assets and liabilities:
         Merchandise inventory             (1,665)            (121,299)
         Other current assets              (34,536)           (36,751)
         Accounts payable                  189,896            168,084
         Other current liabilities        (12,101)           (61,570)
         Other long-term, net              (9,414)            14,751
         Net cash provided by operating    741,791            532,328
         activities
Cash Flows From Investing Activities
Additions to property and equipment        (253,350)          (271,690)
Increase in restricted cash and            (7,043)            (12,345)
investments
Proceeds from investments                  12,022             1,139
         Net cash used in investing        (248,371)          (282,896)
         activities
Cash Flows From Financing Activities
Excess tax benefit from stock-based        23,755             22,123
compensation
Issuance of common stock related to stock  9,318              10,213
plans
Treasury stock purchased                   (37,605)           (26,752)
Repurchase of common stock                 (277,391)          (276,608)
Dividends paid                             (84,881)           (74,604)
         Net cash used in financing        (366,804)          (345,628)
         activities
Net increase (decrease) in cash and cash   126,616            (96,196)
equivalents
Cash and cash equivalents:
         Beginning of period               423,168            646,761
         End of period                     $    549,784    $    550,565
Supplemental Cash Flow Disclosures
Interest paid                              $      4,834  $     4,834
Income taxes paid                          $    299,762    $   305,040





SOURCE Ross Stores, Inc.

Website: http://www.rossstores.com
 
Press spacebar to pause and continue. Press esc to stop.