This excerpt taken from the ROST 8-K filed Feb 7, 2008.
Longer Term Outlook
Commenting on longer term plans for 2009 and 2010, Mr. Balmuth said, Our overarching objective is to deliver profitable growth with improving financial returns. Over the past several years, we expanded our Ross Dress for Less business rapidly in newer markets in the Southeast and Mid-Atlantic, as we worked to improve name brand recognition and realize economies of scale in these regions. Moving forward, until we complete the roll-out of our micro-merchandising initiatives in 2010, we believe that the Companys total store productivity and profitability will be enhanced by targeting expansion in existing markets, with fewer new locations in the Southeast and Mid-Atlantic. In addition, after doubling the size of our dds DISCOUNTS chain with 26 new stores in 2007, for at least the next year or so, we will focus mainly on gaining a better understanding of the dds customer and also on fine-tuning our merchandise assortments to improve performance, especially in the new dds markets of Arizona, Florida and Texas.
Mr. Balmuth continued, As a result of these changes, we have adjusted our longer range earnings model for 2009 and 2010, which now assumes annual unit growth of about 5% to 6% as well as a return to our historical comparable store sales growth rate of about 3%. Combined with our larger stock repurchase program, these modifications are expected to drive average annual earnings per share gains in the mid-teen percentage range and an increase in return on average equity to over 30% by 2010.
To sum up, Mr. Balmuth said, We remain confident in our off-price model as the competitive bargains we offer continue to make our stores attractive destinations for customers in both healthy and more challenging economic landscapes. We strongly believe the actions announced today will enhance stockholder returns while maximizing our long-term prospects for future growth and profitability.
Additional recorded information concerning todays press release and the Companys future outlook can be accessed by calling 706-645-9291, ID # 32752117, from 8:30 a.m. Eastern time on February 7, 2008 through 8:00 p.m. Eastern time on February 8, 2008. A transcript of these comments is available on the Companys website at www.rossstores.com. The Company expects to report February 2008 sales results on Thursday, March 6th and final fourth quarter earnings results on Wednesday, March 19th.
Forward-Looking Statements: This press release and the recorded comments and transcript on our website contain forward-looking statements regarding expected sales and earnings levels that are subject to risks and uncertainties which could cause our actual results to differ materially from managements current expectations. The estimated earnings per share for the fourth quarter and fiscal year ended February 2, 2008 are preliminary and subject to adjustments. The words plan, expect, anticipate, estimate, believe, forecast, projected, guidance, looking ahead and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less® (Ross) and dds DISCOUNTS® include, without limitation, competitive pressures in the apparel industry; changes in the level of consumer spending on or preferences for apparel or home-related merchandise, including the potential impact from uncertainty in mortgage credit markets and higher gas prices; 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; our ability to continue to purchase attractive brand-name merchandise at desirable discounts; our ability to attract and retain personnel with the retail talent necessary to execute our strategies; our ability to achieve targeted levels of sales, profits and cash flows from the former Albertsons store locations; our ability to effectively operate our various supply chain, core merchandising and other information systems; our ability to improve our merchandising capabilities through the implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in our distribution centers; potential pressure on freight costs from higher-than-expected fuel surcharges; and obtaining acceptable new store locations. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2006, Form 10-Qs for fiscal 2007 and Form 8-Ks for fiscal 2007 and 2008. 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.
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Ross Stores, Inc., a Fortune 500 company headquartered in Pleasanton, California, is the nations second largest off-price company with fiscal 2007 revenues of $6.0 billion. As of February 2, 2008, the Company operated 838 Ross Dress for Less® (Ross) stores and 52 dds DISCOUNTS® locations, compared to 771 Ross and 26 dds DISCOUNTS locations at the end of the same period last year. 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 percent off department and specialty store regular prices. dds 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 at www.rossstores.com.
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