This excerpt taken from the ROST 8-K filed Mar 21, 2007.
Pleasanton, California, March 21, 2007 -- Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 14 weeks ended February 3, 2007 grew 35% to $.66, compared to earnings per share of $.49 for the 13 weeks ended January 28, 2006. Net earnings for the 14 weeks ended February 3, 2007 were $93.1 million compared to $71.0 million for the 13 weeks ended January 28, 2006. Sales for the 14 weeks ended February 3, 2007 increased 14% to $1.608 billion. Comparable store sales for the 13 weeks ended January 27, 2007 grew 1% on top of a 6% increase in the prior year.
For the 53 weeks ended February 3, 2007, earnings per share grew 25% to $1.70 from $1.36 for the 52 weeks ended January 28, 2006. Net earnings for the 53 weeks ended February 3, 2007 were a record $241.6 million compared to $199.6 million for the 52 weeks ended January 28, 2006. Sales for the 53 weeks ended February 3, 2007 increased 13% to $5.570 billion. Same store sales for the 52 weeks ended January 27, 2007 were up 4% on top of a 6% increase in the prior year.
Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, We are pleased with the solid earnings growth we achieved in the fourth quarter and the year. Sales during the important holiday season were in line with expectations, benefiting from strength in the Mid Atlantic and Southwest regions and healthy gains in our Home and Shoe businesses. Operating margin in the fourth quarter grew by about 115 basis points, driven by a 60 basis point improvement in gross margin and a decline of about 55 basis points in selling, general and administrative expenses.
Mr. Balmuth continued, For the full year, earnings benefited from healthy top line growth and a 40 basis point increase in operating margin. Improved profitability was driven mainly by increased gross margin, which benefited from lower markdowns, distribution costs and shortage accrual as a percent of sales, more than offsetting higher freight costs and stock option-related expenses. Selling, general and administrative expenses as a percent of sales were flat to the prior year.
Strong operating cash flows during 2006 continued to provide the resources to fund capital investments in new store growth and infrastructure. During fiscal 2006, $224 million in capital expenditures supported the addition of 57 net new Ross locations, 6 dds DISCOUNTS® stores, the buyout of the lease for our Southeast distribution center in South Carolina, 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 2006, we repurchased a total of 7.1 million shares of common stock, for an aggregate purchase price of $200 million. During 2007, we expect to complete the $200 million remaining authorization on our $400 million two-year stock repurchase program approved by our Board of Directors in the fourth quarter of 2005. In addition, in January 2007, our Board approved a 25% increase in our quarterly cash dividend to $.075 per share, our thirteenth consecutive annual dividend increase, Mr. Balmuth concluded.
The Company will host a conference call on Wednesday, March 21, 2007 at 11:00 a.m. Eastern time to communicate additional details concerning the fourth quarter and fiscal year 2006 results and managements outlook and plans for 2007. 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 28, 2007.
Forward-Looking Statements: This press release, the recorded comments and other material on our website contain forward-looking statements that are subject to risks and uncertainties which could cause our actual results to differ materially from managements 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 and dds DISCOUNTS include, without limitation, our ability to convert certain Albertsons LLC real estate sites to the Ross and dds DISCOUNTS formats in a timely and cost effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired 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; 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; our ability to continue to purchase attractive brand-name merchandise at desirable discounts; our ability to identify and successfully enter new geographic markets; and our ability to attract and retain personnel with the retail talent necessary to execute our strategies. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2005 and the Form 10-Qs and 8-Ks for fiscal 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 our outlook at any other point in time. We do 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 nations second largest off-price company with fiscal 2006 revenues of $5.6 billion. As of February 3, 2007, the Company operated 771 Ross Dress for Less® (Ross) stores and 26 dds DISCOUNTS locations, compared to 714 Ross and 20 dds DISCOUNTS locations at the end of fiscal 2005. 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 on the Companys website at www.rossstores.com.
* * * *