Ross Stores Reports Improved Trends in Third Quarter Sales and Earnings

Nachrichtenquelle: Business Wire (engl.)
19.11.2020, 22:01  |  104   |   |   

Ross Stores, Inc. (NASDAQ: ROST) today reported earnings for the 13 weeks ended October 31, 2020 of $0.37 per share versus $1.03 per share for the 13 weeks ended November 2, 2019. Net income was $131 million, compared to $371 million in the prior year period. These results include a one-time charge of $240 million or $0.65 per share impact to net earnings relating to the refinancing of $775 million in senior notes during the quarter. Third quarter 2020 sales declined 2% to $3.8 billion, with comparable store sales down 3%.

For the nine months ended October 31, 2020, the Company reported a per share loss of $(0.43) on a net loss of $153 million which includes the one-time debt refinancing costs. These results compare to net income of $1.2 billion or $3.32 per share for the same period in 2019. Sales year-to-date were $8.3 billion, down from $11.6 billion last year.

Barbara Rentler, Chief Executive Officer, commented, “Sales trends accelerated during the third quarter following a slower start in August, driven by an improvement in our merchandise assortments, a later back-to-school season, stronger performance in our larger markets, and our return to more normal store hours.”

Ms. Rentler continued, “Third quarter operating margin of 4.4% was down from 12.4% in 2019, and was negatively impacted by the one-time debt refinancing charge, which was equivalent to 640 basis points. In addition, the year-over-year margin decline reflects higher COVID-related operating costs in 2020 and the deleveraging effect on expenses throughout the business from the decline in same store sales.”

Ms. Rentler added, “Core business results improved during the quarter demonstrating consumers’ continued focus on value, and our ongoing ability to deliver the bargains our customers have come to expect from us.”

Ms. Rentler further commented, “We continue to maintain a strong financial position with over $5.2 billion of total liquidity. In addition to the refinancing of a portion of our senior notes during the third quarter which will significantly reduce the annual interest expense and total cash outlays over the life of the debt, we took other actions to lower our ongoing debt costs, including the repayment of the $800 million revolving credit facility and terminating the undrawn $500 million revolver.”

Ms. Rentler concluded, “As we enter the fourth quarter, our month-to-date comparable store sales in November are down mid-single-digits. In addition, there remains a high level of uncertainty related to the worsening health crisis and we are concerned with how the upsurge of this pandemic might impact consumer demand during what we expect to be a highly competitive holiday shopping season. Given the lack of visibility we have regarding these external risks and how they may evolve and impact our business, we will continue to manage our operations conservatively and will not be providing sales or earnings per share guidance for the fourth quarter.”

The Company will host a conference call on Thursday, November 19, 2020 at 4:15 p.m. Eastern time to provide additional details concerning its third quarter results. 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 #3089432 until 8:00 p.m. Eastern time on November 27, 2020, as well as on the Company’s website.

Forward-Looking Statements: This press release contains forward-looking statements regarding new store growth, 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,” “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 further significant business disruptions arising from the recent and ongoing COVID-19 pandemic, including potential distribution center and store closures and restrictions on customer access; 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 margin; competitive pressures in the apparel or home-related merchandise retailing industry; issues from selling and importing merchandise produced in other countries and from supply chain disruptions in other countries, including due to the COVID-19 closures; unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and 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 information or 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; damage to our corporate reputation or brands; our need to continually attract, train, and retain associates to execute our off-price strategies; 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 2019, and fiscal 2020 Form 10-Qs and 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 2019 revenues of $16.0 billion. Currently, the Company operates Ross Dress for Less ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,594 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 275 dd's DISCOUNTS 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.

Ross Stores, Inc.
Condensed Consolidated Statements of Operations
 
 

Three Months Ended

 

Nine Months Ended

($000, except stores and per share data, unaudited)

October 31, 2020

 

November 2, 2019

 

October 31, 2020

 

November 2, 2019

 
Sales

$

3,754,509

$

3,849,117

 

$

8,281,894

 

$

11,625,628

 

 
Costs and Expenses
Cost of goods sold

 

2,711,419

 

2,766,432

 

 

6,681,530

 

 

8,311,950

 

Selling, general and administrative

 

877,857

 

604,605

 

 

1,812,657

 

 

1,754,825

 

Interest expense (income), net

 

28,740

 

(4,402

)

 

64,261

 

 

(14,819

)

Total costs and expenses

 

3,618,016

 

3,366,635

 

 

8,558,448

 

 

10,051,956

 

 
Earnings (loss) before taxes

 

136,493

 

482,482

 

 

(276,554

)

 

1,573,672

 

Provision (benefit) for taxes on earnings (loss)

 

5,296

 

111,550

 

 

(123,956

)

 

368,877

 

Net earnings (loss)

$

131,197

$

370,932

 

$

(152,598

)

$

1,204,795

 

 
Earnings (loss) per share
Basic

$

0.37

$

1.04

 

$

(0.43

)

$

3.35

 

Diluted

$

0.37

$

1.03

 

$

(0.43

)

$

3.32

 

 
 
Weighted average shares outstanding (000)
Basic

 

352,481

 

356,879

 

 

352,320

 

 

359,919

 

Diluted

 

354,457

 

359,299

 

 

352,320

 

 

362,455

 

 
 
Store count at end of period

 

1,869

 

1,810

 

 

1,869

 

 

1,810

 

 
Ross Stores, Inc.
Condensed Consolidated Balance Sheets
 
 
($000, unaudited)

October 31, 2020

 

November 2, 2019

Assets
 
Current Assets
Cash and cash equivalents

$

4,416,124

$

1,142,709

Accounts receivable

 

122,654

 

124,853

Merchandise inventory

 

1,630,390

 

2,168,796

Prepaid expenses and other

 

347,399

 

170,304

Total current assets

 

6,516,567

 

3,606,662

 
Property and equipment, net

 

2,706,884

 

2,565,882

Operating lease assets

 

3,132,056

 

3,042,298

Other long-term assets

 

215,159

 

200,999

Total assets

$

12,570,666

$

9,415,841

 
Liabilities and Stockholders’ Equity
 
Current Liabilities
Accounts payable

$

2,426,390

$

1,480,205

Accrued expenses and other

 

655,408

 

496,623

Current operating lease liabilities

 

590,122

 

559,433

Accrued payroll and benefits

 

269,709

 

321,977

Total current liabilities

 

3,941,629

 

2,858,238

 
 
Long-term debt

 

2,512,037

 

312,778

Non-current operating lease liabilities

 

2,672,139

 

2,601,372

Other long-term liabilities

 

290,795

 

225,934

Deferred income taxes

 

135,029

 

140,740

 
Commitments and contingencies
 
Stockholders’ Equity

 

3,019,037

 

3,276,779

Total liabilities and stockholders’ equity

$

12,570,666

$

9,415,841

 
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
 
 

Nine Months Ended

($000, unaudited)

October 31, 2020

 

November 2, 2019

 
Cash Flows From Operating Activities
Net (loss) earnings

$

(152,598

)

$

1,204,795

 

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Depreciation and amortization

 

268,193

 

 

255,089

 

Loss on early extinguishment of debt

 

239,769

 

 

-

 

Stock-based compensation

 

74,267

 

 

70,600

 

Deferred income taxes

 

(14,650

)

 

23,070

 

Change in assets and liabilities:
Merchandise inventory

 

201,949

 

 

(418,354

)

Other current assets

 

(31,732

)

 

(46,161

)

Accounts payable

 

1,126,574

 

 

305,648

 

Other current liabilities

 

118,679

 

 

43,968

 

Income taxes

 

(119,513

)

 

(42,619

)

Operating lease assets and liabilities, net

 

8,979

 

 

12,911

 

Other long-term, net

 

63,206

 

 

1,983

 

Net cash provided by operating activities

 

1,783,123

 

 

1,410,930

 

 
Cash Flows From Investing Activities
Additions to property and equipment

 

(339,545

)

 

(401,251

)

Proceeds from investments

 

-

 

 

517

 

Net cash used in investing activities

 

(339,545

)

 

(400,734

)

 
Cash Flows From Financing Activities
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

)

 

-

 

Issuance of common stock related to stock plans

 

17,088

 

 

16,451

 

Treasury stock purchased

 

(45,091

)

 

(56,920

)

Repurchase of common stock

 

(132,467

)

 

(965,909

)

Dividends paid

 

(101,411

)

 

(278,370

)

Net cash provided by (used in) financing activities

 

1,696,854

 

 

(1,284,748

)

 
Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents

 

3,140,432

 

 

(274,552

)

 
Cash, cash equivalents, and restricted cash and cash equivalents:
Beginning of period

 

1,411,410

 

 

1,478,079

 

End of period

$

4,551,842

 

$

1,203,527

 

 
Reconciliations:
Cash and cash equivalents

$

4,416,124

 

$

1,142,709

 

Restricted cash and cash equivalents included in prepaid expenses and other

 

85,322

 

 

10,947

 

Restricted cash and cash equivalents included in other long-term assets

 

50,396

 

 

49,871

 

Total cash, cash equivalents, and restricted cash and cash equivalents:

$

4,551,842

 

$

1,203,527

 

 
Supplemental Cash Flow Disclosures
Interest paid

$

70,347

 

$

10,560

 

Income taxes paid

$

10,207

 

$

388,426

 

 

 

Ross Stores Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



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Disclaimer

Ross Stores Reports Improved Trends in Third Quarter Sales and Earnings Ross Stores, Inc. (NASDAQ: ROST) today reported earnings for the 13 weeks ended October 31, 2020 of $0.37 per share versus $1.03 per share for the 13 weeks ended November 2, 2019. Net income was $131 million, compared to $371 million in the prior …

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