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Fundado el 20 de mayo de 2013

Ross Stores Reports First Quarter Results and Phased Reopening of Stores

DUBLIN, Calif.–(BUSINESS WIRE)–Ross Stores, Inc. (NASDAQ: ROST) today reported its financial results for the fiscal 2020 first quarter. Both sales and earnings reflect the closure of all Ross Dress for Less® and dd’s DISCOUNTS® locations starting on March 20th through the quarter end due to the ongoing spread of COVID-19 throughout the United States.

More recently, on May 14th, the Company began a phased process of reopening stores on a market by market basis. This followed a careful review of current guidance from health officials and advisors, as well as federal, state, and local governments. Approximately 700 stores have reopened since, with the remaining stores expected to be reopened over the coming weeks.

For the 13 weeks ended May 2, 2020, the Company reported a loss per share of ($0.87), versus earnings per share of $1.15 for the prior year period. The net loss for the 2020 first quarter was $306 million, compared to net income of $421 million last year. Total first quarter sales were $1.8 billion, down from $3.8 billion in the prior year. Given that stores were open for less than seven weeks of the 13-week period, the Company is not reporting comparable store sales.

First quarter 2020 results also include a one-time, non-cash inventory valuation charge of $313 million or $0.58 per share resulting from the extended period of store closures.

Barbara Rentler, Chief Executive Officer, commented, “Our first quarter results reflect the unprecedented impact the COVID-19 pandemic has had on our business, which led to the closure of all stores and our first quarterly operating loss in more than 30 years. Operating margin for the period was negatively affected by the significant revenue decline from stores being closed for approximately half of the quarter and the aforementioned one-time, non-cash inventory valuation charge.”

Ms. Rentler added, “In response to the economic disruption created by this global health crisis, we quickly took decisive actions to increase our liquidity and financial flexibility. These included drawing down $800 million under our revolving credit facility, completing a $2.0 billion public bond offering, suspending our stock repurchase program, and aggressively cutting costs throughout the Company, including ongoing expenses and capital expenditures. Today we are announcing several additional actions, which include the suspension of our quarterly dividend program and reduced new store openings for the year.”

Looking ahead, Ms. Rentler said, “We have a deep bench of proven and experienced leaders throughout the business as well as a very strong financial foundation with over $3.0 billion in liquidity, which in addition to our cash balances includes a new $500 million revolving credit facility. All of this makes us confident in our ability to successfully navigate through these challenging times. We look forward to gradually reopening all of our stores fairly soon when we can return to our mission of providing compelling bargains in a safe environment for our associates and customers.”

Ms. Rentler concluded, “The reopening of our stores will be largely dependent on guidance from health officials as well as government directives. Given the lack of visibility created by COVID-19 and the unknown extent of the impact the virus will have on consumer demand and store productivity, we are not providing second quarter and 2020 full year sales and earnings guidance.”

The Company will host a conference call on Thursday, May 21, 2020 at 4:15 p.m. Eastern time to provide additional details concerning its first 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 #6567612 until 8:00 p.m. Eastern time on May 28, 2020, as well as on the Company’s website.

Forward-Looking Statements: This press release contains forward-looking statements regarding store reopening plans, planned curtailment of 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 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, 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 Form 8-Ks for fiscal 2020. 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 1,566 locations in 39 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 266 dd’s DISCOUNTS® in 20 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 

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

May 2, 2020

 

May 4, 2019

       
Sales    

 $

           1,842,673

 

 $

           3,796,642

       
Costs and Expenses      
Cost of goods sold    

 

              1,889,991

 

 

              2,701,668

Selling, general and administrative    

 

                 415,305

 

 

                 558,250

Interest expense (income), net    

 

                    6,666

 

 

                   (5,635)

Total costs and expenses    

 

              2,311,962

 

 

              3,254,283

       
(Loss) earnings before taxes    

 

               (469,289)

 

 

                 542,359

(Benefit) provision for taxes on (loss) earnings     

 

               (163,447)

 

 

                 121,217

Net (loss) earnings     

 $

             (305,842)

 

 $

              421,142

       
(Loss) earnings per share       
Basic    

 $

                  (0.87)

 

 $

                   1.16

Diluted    

 $

                  (0.87)

 

 $

                   1.15

           
       
Weighted average shares outstanding (000)       
Basic    

 

                 352,202

 

 

                 363,085

Diluted    

 

                 352,202

 

 

                 365,912

           
       
Store count at end of period    

 

                    1,832

 

 

                    1,745

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

May 2, 2020

 

May 4, 2019

Assets      
       
Current Assets      
Cash and cash equivalents    

 $

      2,669,535

 

 $

      1,366,592

Accounts receivable    

 

             49,624

 

 

            121,607

Merchandise inventory    

 

         1,757,263

 

 

         1,813,773

Prepaid expenses and other    

 

            111,493

 

 

            160,733

Total current assets    

 

         4,587,915

 

 

         3,462,705

       
Property and equipment, net    

 

         2,696,718

 

 

         2,436,372

Operating lease assets    

 

         3,078,373

 

 

         2,942,980

Other long-term assets    

 

            365,040

 

 

            207,063

Total assets    

 $

    10,728,046

 

 $

      9,049,120

         
Liabilities and Stockholders’ Equity      
       
Current Liabilities      
Accounts payable    

 $

         706,267

 

 $

      1,296,183

Accrued expenses and other    

 

            374,811

 

 

            450,762

Current operating lease liabilities    

 

            570,832

 

 

            536,900

Accrued payroll and benefits    

 

            166,707

 

 

            220,376

Income taxes payable    

 

                      –

 

 

             89,290

Short-term debt    

 

            805,000

 

 

                      –

Total current liabilities    

 

         2,623,617

 

 

         2,593,511

       
       
Long-term debt    

 

         2,285,614

 

 

            312,552

Non-current operating lease liabilities    

 

         2,631,769

 

 

         2,514,530

Other long-term liabilities    

 

            206,504

 

 

            226,788

Deferred income taxes    

 

            163,150

 

 

            134,213

       
Commitments and contingencies      
       
Stockholders’ Equity    

 

         2,817,392

 

 

         3,267,526

Total liabilities and stockholders’ equity    

 $

    10,728,046

 

 $

      9,049,120

            
Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
       
     
   

Three Months Ended 

($000, unaudited)    

May 2, 2020

 

May 4, 2019

       
Cash Flows From Operating Activities      
Net (loss) earnings    

 $

               (305,842)

 

 $

                421,142

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

 

                     90,598

 

 

                     82,757

Stock-based compensation    

 

                     24,739

 

 

                     19,689

Deferred income taxes    

 

                     13,471

 

 

                     16,543

Change in assets and liabilities:      
Merchandise inventory    

 

                     75,076

 

 

                   (63,331)

Other current assets    

 

                     88,286

 

 

                   (41,777)

Accounts payable    

 

                  (600,918)

 

 

                   122,654

Other current liabilities     

 

                  (268,925)

 

 

                  (108,208)

Income taxes    

 

                  (175,142)

 

 

                     56,206

Operating lease assets and liabilities, net    

 

                       3,001

 

 

                       2,855

Other long-term, net     

 

                     (2,786)

 

 

                         457

Net cash (used in) provided by operating activities    

 

               (1,058,442)

 

 

                   508,987

       
Cash Flows From Investing Activities      
Additions to property and equipment    

 

                  (139,729)

 

 

                   (95,629)

Proceeds from investments    

 

                              –

 

 

                         517

Net cash used in investing activities    

 

                  (139,729)

 

 

                   (95,112)

       
Cash Flows From Financing Activities      
Net proceeds from issuance of short-term debt    

 

                   805,601

 

 

                              –

Payments of short-term debt    

 

                        (615)

 

 

                              –

Net proceeds from issuance of long-term debt    

 

                1,976,030

 

 

                              –

Payments of debt issuance costs    

 

                     (3,135)

 

 

                              –

Issuance of common stock related to stock plans    

 

                       5,444

 

 

                       5,295

Treasury stock purchased    

 

                   (32,317)

 

 

                   (50,880)

Repurchase of common stock    

 

                  (132,467)

 

 

                  (320,130)

Dividends paid    

 

                  (101,414)

 

 

                   (93,722)

Net cash provided by (used in) financing activities    

 

                2,517,127

 

 

                  (459,437)

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

 

                1,318,956

 

 

                   (45,562)

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

 

                1,411,410

 

 

                1,478,079

End of period    

 $

             2,730,366

 

 $

             1,432,517

         
Reconciliations:      
Cash and cash equivalents    

 $

             2,669,535

 

 $

             1,366,592

Restricted cash and cash equivalents included in prepaid expenses and other    

 

                     10,341

 

 

                     11,867

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

 

                     50,490

 

 

                     54,058

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

 $

             2,730,366

 

 $

             1,432,517

       
Supplemental Cash Flow Disclosures      
Interest paid    

 $

                    4,235

 

 $

                    4,219

Income taxes (refunded) paid    

 $

                  (1,777)

 

 $

                  48,468

           

 

Contacts

Travis Marquette

Group Senior Vice President,

Chief Financial Officer

(925) 965-4550

Connie Kao

Vice President, Investor Relations

(925) 965-4668

connie.kao@ros.com