Ross Stores, Inc 10-Q for FY2024 Q2

Ross Stores, Inc. (ROST)

10-Q 2023-09-06 For: 2023-07-29

Added on April 11, 2026

About this 10-Q

Ross Stores, Inc filed this 10-Q on September 6, 2023, covering the quarter ended July 29, 2023 (FY2024 Q2).

Headline figures

Quarter ended July 29, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.93B; up 7.7% from $4.58B a year earlier
Net income: $446.32M; up 16.1% from net income of $384.52M a year earlier
Diluted EPS: $1.32; up 18.9% from $1.11 a year earlier

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	Three Months Ended				Six Months Ended
($000, except stores and per share data, unaudited)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Sales	$	4,934,905	$	4,583,009	$	9,429,591	$	8,916,109

Costs and Expenses
Cost of goods sold	3,569,367		3,399,535		6,861,973		6,595,981
Selling, general and administrative	807,898		667,063		1,554,120		1,336,559
Interest (income) expense, net	(37,214)		10,667		(68,611)		28,363
Total costs and expenses	4,340,051		4,077,265		8,347,482		7,960,903

Earnings before taxes	594,854		505,744		1,082,109		955,206
Provision for taxes on earnings	148,535		121,227		264,599		232,244
Net earnings	$	446,319	$	384,517	$	817,510	$	722,962

Earnings per share
Basic	$	1.33	$	1.11	$	2.42	$	2.09
Diluted	$	1.32	$	1.11	$	2.41	$	2.08


Weighted-average shares outstanding (000)
Basic	336,231		344,884		337,140		345,969
Diluted	337,932		346,106		339,003		347,470


	Three Months Ended				Six Months Ended
($000, unaudited)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net earnings	$	446,319	$	384,517	$	817,510	$	722,962

Other comprehensive income	—		—		—		—

Comprehensive income	$	446,319	$	384,517	$	817,510	$	722,962


($000, except share data, unaudited)	July 29, 2023		January 28, 2023		July 30, 2022
Assets
Current Assets
Cash and cash equivalents	$	4,583,606	$	4,551,876	$	3,903,670

Accounts receivable	175,410		145,694		167,503
Merchandise inventory	2,300,063		2,023,495		2,716,878
Prepaid expenses and other	214,673		183,654		197,020

Total current assets	7,273,752		6,904,719		6,985,071

Property and Equipment
Land and buildings	1,490,681		1,495,006		1,486,450
Fixtures and equipment	4,027,874		3,961,733		3,759,071
Leasehold improvements	1,463,585		1,433,647		1,366,999
Construction-in-progress	518,405		319,319		158,446
	7,500,545		7,209,705		6,770,966
Less accumulated depreciation and amortization	4,189,940		4,028,178		3,841,192
Property and equipment, net	3,310,605		3,181,527		2,929,774

Operating lease assets	3,164,685		3,098,134		3,025,814
Other long-term assets	238,260		232,083		239,263
Total assets	$	13,987,302	$	13,416,463	$	13,179,922

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	2,150,999	$	2,009,924	$	2,085,680
Accrued expenses and other	689,866		638,561		611,186
Current operating lease liabilities	668,028		655,976		647,504
Accrued payroll and benefits	435,300		279,710		300,611
Income taxes payable	25,449		52,075		—


Total current liabilities	3,969,642		3,636,246		3,644,981

Long-term debt	2,458,615		2,456,510		2,454,413
Non-current operating lease liabilities	2,653,632		2,593,961		2,525,512
Other long-term liabilities	231,945		224,104		231,285
Deferred income taxes	218,726		217,059		196,780

Commitments and contingencies

Stockholders’ Equity
Common stock, par value $.01 per share Authorized 1,000,000,000 shares Issued and outstanding 338,982,000, 342,753,000 and 347,552,000 shares, respectively	3,390		3,428		3,475
Additional paid-in capital	1,885,406		1,820,249		1,769,424
Treasury stock	(623,185)		(584,750)		(574,529)

Retained earnings	3,189,131		3,049,656		2,928,581
Total stockholders’ equity	4,454,742		4,288,583		4,126,951
Total liabilities and stockholders’ equity	$	13,987,302	$	13,416,463	$	13,179,922


	Six Months Ended July 29, 2023


	Common stock			Additional paid-in capital		Treasury stock		Retained earnings
(000)	Shares	Amount								Total
Balance at January 28, 2023	342,753	$	3,428	$	1,820,249	$	(584,750)	$	3,049,656		$	4,288,583
Net earnings	—	—		—		—		371,191			371,191
Common stock issued under stock plans, net of shares

used for tax withholding	461	4		6,145		(37,522)		—			(31,373)
Stock-based compensation	—	—		33,063		—		—			33,063
Common stock repurchased, inclusive of excise tax	(2,169)	(22)		(9,729)		—		(226,523)			(236,274)
Dividends declared ($0.335 per share)	—	—		—		—		(114,794)			(114,794)
Balance at April 29, 2023	341,045	$	3,410	$	1,849,728	$	(622,272)	$	3,079,530		$	4,310,396
Net earnings	—	—		—		—		446,319			446,319
Common stock issued under stock plans, net of shares
used for tax withholding	89	1		6,208		(913)		—			5,296
Stock-based compensation	—	—		39,429		—		—			39,429
Common stock repurchased, inclusive of excise tax	(2,152)	(21)		(9,959)		—		(222,713)			(232,693)
Dividends declared ($0.335 per share)	—	—		—		—		(114,005)			(114,005)
Balance at July 29, 2023	338,982	$	3,390	$	1,885,406	$	(623,185)	$	3,189,131		$	4,454,742
The accompanying notes are an integral part of these condensed consolidated financial statements.


	Six Months Ended July 30, 2022


	Common stock			Additional paid-in capital		Treasury stock		Retained earnings
(000)	Shares	Amount								Total
Balance at January 29, 2022	351,720	$	3,517	$	1,717,530	$	(535,895)	$	2,874,898		$	4,060,050
Net earnings	—	—		—		—		338,445			338,445
Common stock issued under stock plans, net of shares

used for tax withholding	1,131	11		5,906		(38,113)		—			(32,196)
Stock-based compensation	—	—		36,071		—		—			36,071
Common stock repurchased	(2,524)	(25)		(10,266)		—		(229,274)			(239,565)
Dividends declared ($0.310 per share)	—	—		—		—		(108,908)			(108,908)
Balance at April 30, 2022	350,327	$	3,503	$	1,749,241	$	(574,008)	$	2,875,161		$	4,053,897
Net earnings	—	—		—		—		384,517			384,517
Common stock issued under stock plans, net of shares
used for tax withholding	153	1		5,974		(521)		—			5,454
Stock-based compensation	—	—		26,803		—		—			26,803
Common stock repurchased	(2,928)	(29)		(12,594)		—		(222,812)			(235,435)
Dividends declared ($0.310 per share)	—	—		—		—		(108,285)			(108,285)
Balance at July 30, 2022	347,552	$	3,475	$	1,769,424	$	(574,529)	$	2,928,581		$	4,126,951








The accompanying notes are an integral part of these condensed consolidated financial statements.


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


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


($000)	July 29, 2023		January 28, 2023		July 30, 2022
Cash and cash equivalents	$	4,583,606	$	4,551,876	$	3,903,670
Restricted cash and cash equivalents included in:
Prepaid expenses and other	12,955		12,677		11,432
Other long-term assets	48,736		47,688		48,734
Total restricted cash and cash equivalents	61,691		60,365		60,166
Total cash, cash equivalents, and restricted cash and cash equivalents	$	4,645,297	$	4,612,241	$	3,963,836


	Three Months Ended				Six Months Ended
Statements of Earnings Classification ($000)	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Cost of goods sold	$	21,306	$	15,675	$	38,631	$	34,221
Selling, general and administrative	18,123		11,128		33,861		28,653
Total	$	39,429	$	26,803	$	72,492	$	62,874


(000, except per share data)	Number of shares	Weighted-average grant date fair value
Unvested at January 28, 2023	3,943	$	99.69
Awarded	1,188	108.90
Released	(936)	94.48
Forfeited	(35)	101.61
Unvested at July 29, 2023	4,160	$	103.61


	Three Months Ended						Six Months Ended
Shares in (000s)	Basic EPS		Effect of dilutive common stock equivalents		Diluted EPS		Basic EPS		Effect of dilutive common stock equivalents		Diluted EPS
July 29, 2023
Shares	336,231		1,701		337,932		337,140		1,863		339,003
Amount	$	1.33	$	(0.01)	$	1.32	$	2.42	$	(0.01)	$	2.41

July 30, 2022
Shares	344,884		1,222		346,106		345,969		1,501		347,470
Amount	$	1.11	$	—	$	1.11	$	2.09	$	(0.01)	$	2.08


	Three Months Ended		Six Months Ended
Store Count	July 29, 2023	July 30, 2022	July 29, 2023		July 30, 2022
Ross Dress for Less
Beginning of the period	1,704	1,648	1,693		1,628
Opened in the period	18	21	29	1	43
Closed in the period	—	—	—		(2)	2
Total Ross Dress for Less stores end of period	1,722	1,669	1,722		1,669
dd’s DISCOUNTS
Beginning of the period	330	303	322		295
Opened in the period	9	8	17		16
Closed in the period	—	—	—		—
Total dd’s DISCOUNTS stores end of period	339	311	339		311
Total stores end of period	2,061	1,980	2,061		1,980

1 Includes the reopening of a store previously temporarily closed due to a weather event.
2 Includes the temporary closure of a store impacted by a weather event.


($000)	Less than one year		Greater than one year		Total¹

Recorded contractual obligations:
Senior notes	$	—	$	2,474,991	$	2,474,991

Operating leases	704,810		2,695,278		3,400,088
New York buying office ground lease2	7,552		1,105,311		1,112,863
Unrecorded contractual obligations:
Real estate obligations3	11,288		180,365		191,653
Interest payment obligations	80,316		394,976		475,292
Purchase obligations4	4,150,967		63,030		4,213,997
Total contractual obligations	$	4,954,933	$	6,913,951	$	11,868,884

1 We have a $59.9 million liability for unrecognized tax benefits that is included in Other long-term liabilities on our interim Condensed Consolidated Balance Sheet. This liability is excluded from the schedule above as the timing of payments cannot be reasonably estimated.

2 Our New York buying office building is subject to a 99-year ground lease.
3 Minimum lease payments for leases signed that have not yet commenced.
4 Purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects, store fixtures and supplies, and information technology services, transportation, and maintenance contracts.


	Total number of shares (or units) purchased1	Average price paid per share (or unit)	Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs ($000)2
Period
May
(4/30/2023 - 5/27/2023)	585,615	$103.65	585,031	$	654,900
June
(5/28/2023-7/01/2023)	886,786	$105.81	878,528	$	561,920
July
(7/02/2023- 7/29/2023)	688,314	$111.59	688,314	$	485,110
Total	2,160,715	$107.06	2,151,873	$	485,110


Exhibit
Number			Exhibit
3.1			Certificate of Incorporation of Ross Stores, Inc. as amended (Corrected First Restated Certificate of Incorporation, dated March 17, 1999, together with amendments thereto through Amendment of Certificate of Incorporation dated May 29, 2015) incorporated by reference to Exhibit 3.1 to the Form 10-Q filed by Ross Stores, Inc. for its quarter ended August 1, 2015.

3.2			Amended and Restated Bylaws of Ross Stores, Inc. (as amended March 8, 2023), incorporated by reference to Exhibit 3.2 to the Form 8-K filed by Ross Stores, Inc. on March 14, 2023.

10.1			Employment Agreement effective June 19, 2023 between Barbara Rentler and Ross Stores, Inc.

15			Letter re: Unaudited Interim Financial Information from Deloitte & Touche LLP dated September 5 , 2023.

31.1			Certification of Chief Executive Officer Pursuant to Sarbanes-Oxley Act Section 302(a).

31.2			Certification of Chief Financial Officer Pursuant to Sarbanes-Oxley Act Section 302(a).

32.1			Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2			Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

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			Commission file number:			0-14678


($000)	July 29, 2023		January 28, 2023		July 30, 2022





3.375% Senior Notes due 2024	$	249,484	$	249,257	$	249,032
4.600% Senior Notes due 2025	697,800		697,161		696,523
0.875% Senior Notes due 2026	496,652		496,038		495,425
4.700% Senior Notes due 2027	240,116		239,899		239,684
4.800% Senior Notes due 2030	132,688		132,602		132,516
1.875% Senior Notes due 2031	495,537		495,254		494,972
5.450% Senior Notes due 2050	146,338		146,299		146,261
Total Long-term debt	$	2,458,615	$	2,456,510	$	2,454,413


		ROSS STORES, INC.
		(Registrant)


Date:	September 5, 2023	By:	/s/Jeffrey P. Burrill
			Jeffrey P. Burrill
			Senior Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)


Ross Stores, Inc. and Subsidiaries						Executive

/s/K. Gunnar Bjorklund						/s/Barbara Rentler
By: K. Gunnar Bjorklund						Barbara Rentler
Chair, Compensation Committee						Chief Executive Officer


Date:	September 5, 2023	/s/Adam Orvos
		Adam Orvos
		Executive Vice President, Chief Financial Officer