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Press release from PR Newswire

Ross Stores Reports Strong Fourth Quarter And Fiscal Year 2012 Results

Thursday, March 21, 2013

Ross Stores Reports Strong Fourth Quarter And Fiscal Year 2012 Results08:30 EDT Thursday, March 21, 2013PLEASANTON, Calif., March 21, 2013 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 14 weeks ended February 2, 2013 of $1.07, up from $.85 for the 13 weeks ended January 28, 2012.  Net earnings for the 14 weeks ended February 2, 2013 grew to $236.6 million, up 23% from $192.0 million for the 13 weeks ended January 28, 2012. Sales for the 14 weeks ended February 2, 2013 grew 15% to $2.761 billion. Comparable store sales for the 13 weeks ended January 26, 2013, rose 5% on top of a 7% increase in the fourth quarter of 2011.For the 53 weeks ended February 2, 2013, earnings per share grew to $3.53, from $2.86 for the 52 weeks ended January 28, 2012.  Net earnings for the 53 weeks ended February 2, 2013 grew 20% to $786.8 million, compared to $657.2 million for the 52 weeks ended January 28, 2012.  Sales for the 53 weeks ended February 2, 2013, rose 13% to $9.721 billion. Same store sales for the 52 weeks ended January 26, 2013 grew 6% compared to a 5% gain in 2011.  Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "We are pleased with the record sales and earnings we delivered in the fourth quarter and 2012 fiscal year, especially considering they were achieved on top of strong multi-year gains. Results for both periods benefited from our ongoing ability to deliver compelling bargains on a wide assortment of exciting name brand fashions for the family and the home to today's value-focused consumers."Mr. Balmuth continued, "Earnings before interest and taxes for the 2012 fourth quarter grew to 13.7% of sales, up from 13.0% in the fourth quarter of 2011.  For fiscal 2012, operating margin rose to a record 13.1%, a gain of 75 basis points on top of an 85 basis point increase in 2011. Profit margins for both the quarter and the full year mainly benefited from higher merchandise gross margin, leverage on operating expenses from the strong gains in same store sales and the impact of the 53rd week."   Strong operating cash flows during 2012 continued to provide the resources to make capital investments in new store growth and infrastructure, as well as fund the completion of the Company's prior stock repurchase program and ongoing dividends.  A total of 7.5 million shares of common stock were repurchased during fiscal 2012, for an aggregate purchase price of $450 million, completing the two-year $900 million repurchase program announced in early 2011. In January 2013, the Company's Board of Directors approved a new two-year $1.1 billion stock repurchase program as well as a 21% increase in the regular quarterly cash dividend to $.17 per share.  Mr. Balmuth noted, "The growth of our stock repurchase and dividend programs has been driven by the significant amounts of cash our business generates after self-funding store expansion and other capital needs.  We have repurchased stock as planned every year since 1993, and this is the 19th consecutive increase since initiating our quarterly cash dividend in 1994. This consistent record reflects our unwavering commitment to enhancing stockholder value and returns."Looking ahead, Mr. Balmuth said, "We plan to stay intently focused on our core off-price mission of consistently delivering great bargains to our customers.  This continues to be the key to maximizing our opportunities for growth in sales and profits over both the short and the long term."Discontinuing Monthly Sales ReportingBeginning with the second quarter of fiscal 2013, the Company will no longer report monthly sales. Quarterly comparable store sales results will be provided with regularly scheduled earnings releases and conference calls.In commenting, Mr. Balmuth said, "Reporting sales quarterly aligns us with the majority of other retailers who have already adopted this practice, while also increasing the focus on longer-term performance."  The Company will host a conference call on Thursday, March 21, 2013 at 11:00 a.m. Eastern time to provide additional details concerning the fourth quarter and fiscal year 2012 results and management's outlook and plans for fiscal 2013.  A real-time audio webcast of the conference call will be available in the Investors section of the Company's website, located at An audio playback will be available at 404-537-3406, PIN # 22346952 until 8:00 p.m. Eastern time on March 28, 2013, as well as at the Company's website address.  Forward-Looking Statements:  This press release and the recorded comments on our corporate website contain 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 retailing merchandise 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 to interest rates, recession, inflation, deflation, energy costs, tax rates and policy, unemployment trends, and fluctuating commodity costs; changes in geopolitical and geo-economic 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, core merchandising and other information systems; improving our merchandising and transaction processing capabilities through the implementation of new processes and systems enhancements; managing our planned data center and headquarters moves without disruption or unanticipated costs; 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 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 2011, Form 10-Qs for fiscal 2012 and Form 8-Ks for fiscal 2012 and 2013.  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 Pleasanton, California, with fiscal 2012 revenues of $9.7 billion.  The Company operates Ross Dress for Less® ("Ross"), the largest off-price apparel and home fashion chain in the United States with 1,091 locations in 33 states, the District of Columbia and Guam at fiscal 2012 year end. 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 108 dd's DISCOUNTS® in eight states at the end of fiscal 2012 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 Contact: Michael Hartshorn Connie WongSenior Vice President, Director, Investor RelationsDeputy Chief Financial Officer (925) 965-4668(925) 965-4503  Ross Stores, Inc.Condensed Consolidated Statements of EarningsThree Months Ended Twelve Months Ended February 2,January 28,February 2,January 28,($000, except stores and per share data, unaudited)2013201220132012Sales$2,760,646$2,397,878$9,721,065$8,608,291Costs and ExpensesCosts of goods sold1,993,6611,745,0347,011,4286,240,760Selling, general and administrative390,003341,7941,437,8861,304,065Interest expense, net9462,6936,90710,322Total  costs and expenses2,384,6102,089,5218,456,2217,555,147Earnings before taxes376,036308,3571,264,8441,053,144Provision for taxes on earnings139,434116,405478,081395,974Net earnings$   236,602$   191,952$   786,763$   657,170Earnings per share 1Basic$        1.09$        0.86$        3.59$        2.91Diluted$        1.07$        0.85$        3.53$        2.86Weighted average shares outstanding (000)1Basic216,936222,288219,130225,915Diluted220,508226,511222,784229,982Dividends 1Cash dividends declared per share$        0.31$        0.25$        0.59$        0.47Stores open at end of period1,1991,1251,1991,125 1All share and per share amounts have been adjusted for the two-for-one stock split effective December 15, 2011.  Ross Stores, Inc.Condensed Consolidated Balance SheetsFebruary 2,January 28,($000, unaudited)20132012AssetsCurrent AssetsCash and cash equivalents$   646,761$   649,835Short-term investments1,087658Accounts receivable59,61750,848Merchandise inventory1,209,2371,130,070Prepaid expenses and other94,31887,362Deferred income taxes20,4075,598Total current assets2,031,4271,924,371Property and equipment, net1,493,2841,241,722Long-term investments4,3745,602Other long-term assets141,476129,514Total assets$3,670,561$3,301,209Liabilities and Stockholders' EquityCurrent LiabilitiesAccounts payable    $   807,534$   761,717Accrued expenses and other320,415304,654Accrued payroll and benefits241,129248,552Income taxes payable53,50431,129Total current liabilities1,422,5821,346,052Long-term debt150,000150,000Other long-term liabilities246,815203,625Deferred income taxes84,301108,520Commitments and contingenciesStockholders' Equity1,766,8631,493,012Total liabilities and stockholders' equity$3,670,561$3,301,209  Ross Stores, Inc.Condensed Consolidated Statements of Cash FlowsTwelve  Months EndedFebruary 2,January 28,($000, unaudited)20132012Cash Flows From Operating ActivitiesNet earnings$   786,763$  657,170Adjustments to reconcile net earnings to net cashprovided by operating activities:Depreciation and amortization185,491159,892Stock-based compensation48,95240,404Deferred income taxes(39,028)21,722Tax benefit from equity issuance29,98919,040Excess tax benefit from stock-based compensation(29,103)(18,180)Change in assets and liabilities:Merchandise inventory(79,167)(43,153)Other current assets(14,474)(10,329)Accounts payable40,109(11,614)Other current liabilities 18,146(2,109)Other long-term, net31,9667,262Net cash provided by operating activities979,644820,105Cash Flows From Investing ActivitiesAdditions to property and equipment(424,434)(416,271)Increase in restricted cash and investments(2,107)(60,086)Purchases of investments(5,430)-Proceeds from investments6,2474,589Net cash used in investing activities(425,724)(471,768)Cash Flows From Financing ActivitiesExcess tax benefit from stock-based compensation29,10318,180Issuance of common stock related to stock plans19,04317,290Treasury stock purchased(29,446)(15,854)Repurchase of common stock(450,000)(450,000)Dividends paid(125,694)(102,042)Net cash used in financing activities(556,994)(532,426)Net decrease in cash and cash equivalents(3,074)(184,089)Cash and cash equivalents:Beginning of year649,835833,924End of year$   646,761$  649,835Supplemental Cash Flow DisclosuresInterest paid$      9,668$     9,668Income taxes paid$   435,808$  370,074Non-Cash Investing Activities(Decrease) increase in fair value of investment securities$          (76)$        226 SOURCE Ross Stores, Inc.