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Ross Stores 8-K 2006

Documents found in this filing:

  1. 8-K
  2. Graphic
  3. Graphic

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):
March 15, 2006

ROSS STORES, INC.

(Exact name of registrant as specified in its charter)


Delaware

 

0-14678

 

94-1390387

(State or other jurisdiction of incorporation)

 

(Commission File No.)

 

(I.R.S. Employer Identification No.)

 

 

 

 

 

4440 Rosewood Drive, Pleasanton, California, 94588-3050    

(Address of principal executive offices)

 

 

 

 

 

Registrant’s telephone number, including area code:

(925) 965-4400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 




ROSS STORES, INC.          4440 Rosewood Drive, Pleasanton, California 94588-3050          (925) 965-4400


Item 2.02 Results of Operations and Financial Condition.

On March 15, 2006, the Company issued a press release regarding the Company’s financial results for its fourth fiscal quarter and fiscal year ended January 28, 2006.  The full text of the Company’s press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

             (c)       Exhibits.

Exhibit  No.

 

Description


 


99.1

 

March 15, 2006 Press Release by Ross Stores, Inc.*



*Pursuant to Item 2.02 of Form 8-K, Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:     March 15, 2006

 

 

 

 

ROSS STORES, INC.

 

Registrant

     
     

 

By: 

/s/J. Call

 

 


 

 

John G. Call

 

 

Senior Vice President,
Chief Financial Officer, Principal

 

 

Accounting Officer and Corporate Secretary


Exhibit 99.1

Message

 

 


 

FOR IMMEDIATE RELEASE


Contact:

John G. Call

Katie Loughnot

 

Senior Vice President,

Vice President, Investor Relations

 

Chief Financial Officer

Phone:  (925) 965-4509

 

Phone:  (925) 965-4315

Email:  katie.loughnot@ros.com

ROSS STORES REPORTS FOURTH QUARTER AND FISCAL 2005 RESULTS

          Pleasanton, California, March 15, 2006 -- Ross Stores, Inc. (Nasdaq: ROST) today reported that net earnings for the 13 weeks ended January 28, 2006 increased 37% to $71.0 million, compared to $51.8 million for the 13 weeks ended January 29, 2005.  Earnings per share for the 13 weeks ended January 28, 2006 grew 40% to $.49, compared to earnings per share of $.35 for the prior year period. 

          For the 2005 fiscal year ended January 28, 2006, net earnings totaled $199.6 million, and earnings per share were $1.36, compared to net earnings of $169.9 million and earnings per share of $1.13 for the 2004 fiscal year ended January 29, 2005.  Fiscal 2004 results include a non-cash pre-tax charge of approximately $15.8 million, or $.06 per share, to write-down the value of the Company’s former headquarters and distribution center in Newark, California to its estimated fair market value.  

          Sales for the fourth quarter ended January 28, 2006 increased 16% to $1.411 billion, with comparable store sales up 6% over the prior year.   For the 2005 fiscal year ended January 28, 2006, sales increased 17% to $4.944 billion, with comparable store sales up 6% over the prior year.

          Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, “We are pleased with the solid earnings growth we realized in the fourth quarter of 2005, which was driven by a combination of strong sales gains and expansion in operating margin.  Gross profit margin for the quarter rose about 185 basis points, partially offset by an approximate 70 basis point increase in selling, general and administrative expenses mainly related to higher incentive plan costs.”

          Mr. Balmuth continued, “For the full 2005 fiscal year, earnings benefited from a solid rebound in sales, partially offset by a combination of higher-than-expected markdowns related to transitional systems and distribution issues earlier in the year, higher expenses related to inventory shortage, and higher incentive plan and information technology costs compared to fiscal 2004.”    




ROSS STORES, INC.          4440 Rosewood Drive, Pleasanton, California 94588-3050          (925) 965-4400


          “We are pleased to report that healthy operating cash flows during 2005 continued to provide the resources to fund capital investments in new store growth and infrastructure.  During fiscal 2005, $176 million in capital expenditures supported the addition of 75 net new Ross locations, ten dd’s DISCOUNTS® stores, the purchase of a new warehouse facility in Moreno Valley, California, and other various information technology and infrastructure investments,” said Mr. Balmuth.

          “We also continued to enhance stockholder value through our share repurchase and dividend programs.  During 2005, we completed the two-year $350 million stock repurchase program authorized by our Board of Directors in 2004, buying back a total of 6.4 million shares of common stock in 2005, for an aggregate purchase of $175 million.  In addition, in November 2005, our Board of Directors authorized a new $400 million two-year stock repurchase program for 2006 and 2007 and approved a 20% increase in our quarterly cash dividend,” Mr. Balmuth concluded. 

          The Company will host a conference call on Wednesday, March 15, 2006 at 11:00 a.m. Eastern time to communicate additional details concerning the fourth quarter and fiscal year 2005 results and management’s outlook and plans for 2006.  A real time audio webcast of the conference call will be available at www.rossstores.com.  An audio playback will be available at (402) 220-5900, PIN #2342 through March 22, 2006. 

          Forward-Looking Statements:  This press release and the recorded comments and transcript on the Company’s website contain forward-looking statements regarding expected sales and earnings levels that are subject to risks and uncertainties which could cause the Company’s actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Stores and dd’s DISCOUNTS® include, without limitation,the Company’s ability to effectively operate its various supply chain, core merchandising and other information systems, including generation of all necessary data and reports in a timely and cost effective manner; its ability to improve its micro-merchandising capabilities through the implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in its distribution centers; obtaining acceptable new store locations; competitive pressures in the apparel industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise; changes in geopolitical and general economic conditions; unseasonable weather trends; disruptions in supply chain; lower than planned gross margin, including higher than planned markdowns and higher than expected inventory shortage; greater than planned operating costs; the Company’s ability to continue to purchase attractive brand-name merchandise at desirable discounts; the Company’s ability to identify and successfully enter new geographic markets; and the Company’s ability to attract and retain personnel with the talent necessary to execute its strategies.  Other risk factors are detailed in the Company’s SEC filings including, without limitation, the Form 10-K for fiscal 2004, the Form 10-Q’s for fiscal 2005, and the Form 8-K’s for fiscal 2005 and 2006.  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 the Company’s outlook at any other point in time.  The Company does not undertake to update or revise these forward-looking statements.

* * * * *


          Ross Stores, Inc., a Fortune 500 and Nasdaq 100 (ROST) company headquartered in Pleasanton, California, is the nation’s second largest off-price company with fiscal 2005 revenues of $4.9 billion.  As of January 28, 2006, the Company operated 714 Ross stores and 20 dd’s DISCOUNTS® locations, compared to 639 Ross stores and 10 dd’s DISCOUNTS® locations at the end of the same period last year.  Ross Stores 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 percent off department and specialty store regular prices.  dd’s DISCOUNTS® features 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 percent off moderate department and discount store regular prices.  Additional information is available on the Company’s website at www.rossstores.com.

* * * *


ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 


 


 

 

 

January 28,

 

January 29,

 

January 28,

 

January 29,

 

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

 

2006

 

2005

 

2006

 

2005

 


 


 


 


 


 

Sales

 

$

1,411,488

 

$

1,211,754

 

$

4,944,179

 

$

4,239,990

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

1,080,443

 

 

949,869

 

 

3,832,296

 

 

3,279,877

 

Selling, general and administrative

 

 

215,795

 

 

176,767

 

 

786,439

 

 

664,395

 

Impairment of long-lived assets

 

 

—  

 

 

—  

 

 

—  

 

 

15,818

 

Interest (income) expense, net

 

 

(1,559

)

 

18

 

 

(2,898

)

 

915

 

 

 



 



 



 



 

Total costs and expenses

 

 

1,294,679

 

 

1,126,654

 

 

4,615,837

 

 

3,961,005

 

Earnings before taxes

 

 

116,809

 

 

85,100

 

 

328,342

 

 

278,985

 

Provision for taxes on earnings

 

 

45,831

 

 

33,274

 

 

128,710

 

 

109,083

 

 

 



 



 



 



 

Net earnings

 

$

70,978

 

$

51,826

 

$

199,632

 

$

169,902

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

$

0.36

 

$

1.38

 

$

1.15

 

Diluted

 

$

0.49

 

$

0.35

 

$

1.36

 

$

1.13

 

Weighted average shares outstanding (000)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

142,439

 

 

145,662

 

 

144,325

 

 

147,468

 

Diluted

 

 

144,665

 

 

148,563

 

 

146,532

 

 

150,380

 

Dividends per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.120

 

$

0.093

 

$

0.220

 

$

0.178

 

Stores open at end of period

 

 

734

 

 

649

 

 

734

 

 

649

 


ROSS STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

January 28,

 

January 29,

 

($000, unaudited)

 

2006

 

2005

 


 


 


 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

191,767

 

$

115,331

 

Short-term investments

 

 

12,763

 

 

67,400

 

Accounts receivable

 

 

29,122

 

 

31,154

 

Merchandise inventory

 

 

938,091

 

 

853,112

 

Prepaid expenses and other

 

 

37,090

 

 

46,756

 

Deferred income taxes

 

 

20,014

 

 

14,184

 

 

 



 



 

Total current assets

 

 

1,228,847

 

 

1,127,937

 

Property and equipment, net

 

 

639,852

 

 

556,178

 

Other long-term assets

 

 

58,837

 

 

57,100

 

Long-term investments

 

 

11,202

 

 

—  

 

 

 



 



 

Total assets

 

$

1,938,738

 

$

1,741,215

 

 

 



 



 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other

 

$

803,397

 

$

711,561

 

Income taxes payable

 

 

25,586

 

 

—  

 

Short-term debt

 

 

50,000

 

 

—  

 

 

 



 



 

Total current liabilities

 

 

878,983

 

 

711,561

 

Long-term debt

 

 

—  

 

 

50,000

 

Other long-term liabilities

 

 

122,926

 

 

116,668

 

Deferred income taxes

 

 

100,657

 

 

97,417

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity

 

 

836,172

 

 

765,569

 

 

 



 



 

Total liabilities and stockholders’ equity

 

$

1,938,738

 

$

1,741,215

 

 

 



 



 


ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended

 

 

 


 

 

 

January 28,

 

January 29,

 

($000, unaudited)

 

2006

 

2005

 


 


 


 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net earnings

 

$

199,632

 

$

169,902

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

110,848

 

 

94,593

 

Impairment of long-lived assets

 

 

—  

 

 

15,818

 

Deferred income taxes

 

 

(2,590

)

 

28,101

 

Tax benefit from equity issuance

 

 

21,947

 

 

14,802

 

Change in assets and liabilities:

 

 

 

 

 

 

 

Merchandise inventory

 

 

(84,979

)

 

(11,621

)

Other current assets, net

 

 

11,698

 

 

(23,151

)

Accounts payable

 

 

21,448

 

 

2,908

 

Other current liabilities

 

 

94,670

 

 

(5,123

)

Other long-term, net

 

 

2,517

 

 

11,928

 

 

 



 



 

Net cash provided by operating activities

 

 

375,191

 

 

298,157

 

 

 



 



 

CASH FLOWS USED IN INVESTING ACTIVITIES

 

 

 

 

 

 

 

Additions to property and equipment

 

 

(175,851

)

 

(149,541

)

Sales (purchases) of investments

 

 

43,455

 

 

(67,400

)

Proceeds from sale of Newark Facility

 

 

—  

 

 

17,400

 

 

 



 



 

Net cash used in investing activities

 

 

(132,396

)

 

(199,541

)

 

 



 



 

CASH FLOWS USED IN FINANCING ACTIVITIES

 

 

 

 

 

 

 

Issuance of common stock related to stock plans

 

 

45,982

 

 

23,391

 

Treasury stock purchased

 

 

(6,626

)

 

(7,962

)

Repurchase of common stock

 

 

(175,000

)

 

(175,000

)

Dividends paid

 

 

(30,715

)

 

(25,260

)

 

 



 



 

Net cash used in financing activities

 

 

(166,359

)

 

(184,831

)

 

 



 



 

Net increase (decrease) in cash and cash equivalents

 

 

76,436

 

 

(86,215

)

 

 



 



 

Cash and cash equivalents:

 

 

 

 

 

 

 

Beginning of year

 

 

115,331

 

 

201,546

 

 

 



 



 

End of year

 

$

191,767

 

$

115,331

 

 

 



 



 

NON-CASH INVESTING ACTIVITIES

 

 

 

 

 

 

 

Straight-line rent capitalized in build-out period

 

$

3,290

 

$

4,277

 

Change in fair value of investment securities

 

$

20

 

$

—  

 

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