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Retail

Ross Stores Reports First Quarter Earnings Announces New $1.5 Billion Stock Repurchase Program

The off-price retailer announced net income of $476 million for the period, with sales totaling $4.5 billion and comparable store sales up a robust 13 percent versus 2019.

5/21/2021
DUBLIN, Calif. -- Ross Stores, Inc. (NASDAQ: ROST) reported earnings per share for the 13 weeks ended May 1, 2021 grew 17% to $1.34 on net income of $476 million. This compares to $1.15 per share or net earnings of $421 million for the 13 weeks ended May 4, 2019. Sales totaled $4.5 billion, with comparable store sales up a robust 13% versus 2019.

As previously announced, financial results and guidance throughout fiscal 2021 will be compared against fiscal 2019. The significant impact from the extended closure of our operations in the spring of 2020, and the disruptions caused by COVID-19 throughout last year, make this a more relevant basis for comparison.

Barbara Rentler, Chief Executive Officer, commented, “First quarter sales significantly exceeded our expectations as we benefited considerably from a combination of government stimulus payments, ongoing vaccine rollouts, easing of COVID restrictions, and pent-up consumer demand. In addition, customers responded enthusiastically to the broad assortment of great bargains we offered throughout our stores. Operating margin of 14.2% was well above plan and slightly above 2019 as leverage from the strong comparable sales gains offset the expected expense pressures from higher freight and wages, as well as ongoing COVID-related operating costs.”

BOARD APPROVES NEW $1.5 BILLION STOCK REPURCHASE PROGRAM

The Company’s Board of Directors authorized a new program to repurchase up to $1.5 billion of its common stock through fiscal 2022, with plans to buy back $650 million this year and $850 million in 2022.

Rentler noted, “The reinstatement of our share repurchase program reflects the current strength of our balance sheet, confidence in the Company’s ability to generate excess cash after funding our growth and other capital needs of the business, and our long-standing commitment to enhancing stockholder value and returns.”

FISCAL 2021 GUIDANCE

Looking ahead, Rentler said, “Our results and the clear improvement in the macroeconomic environment make us optimistic about our prospects for the balance of the year. That said, it is difficult to precisely predict the lasting impact from the factors that benefited our first quarter sales results, especially the recent government stimulus payments. While we hope to do better, we are forecasting same store sales to be up 5% to 7% for the 13 weeks ending July 31, 2021 versus the same period in 2019. Second quarter 2021 earnings per share are projected to be $0.80 to $0.89, versus $1.14 in fiscal 2019. For the 52 weeks ending January 29, 2022, we are planning annual comparable store sales gains of 7% to 9% versus 2019 and earnings per share of $3.93 to $4.20. Guidance for both periods reflect our expectation for increased freight costs, higher wages, and COVID-related expenses.”

Rentler concluded, “Over the longer-term, we remain confident about our opportunity to gain market share as we expect to benefit significantly from a favorable competitive climate given the large number of retail store closures and bankruptcies in recent years. This, along with consumers’ heightened focus on value and convenience, bodes well for our ability to achieve solid results into the future.”

About Ross Stores

Ross Stores, Inc. is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company headquartered in Dublin, California, with fiscal 2020 revenues of $12.5 billion. Currently, the Company operates Ross Dress for Less® (“Ross”), the largest off-price apparel and home fashion chain in the United States with 1,589 locations in 40 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 277 dd’s DISCOUNTS® stores in 21 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. Additional information is available at www.rossstores.com.
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