Ross Stores Reports Record Fourth Quarter and Fiscal 2017 Results
Increases 2018 Stock Repurchase Authorization and Raises Quarterly Cash Dividend
Also Provides First Quarter and Fiscal 2018 Guidance
March 06, 2018 04:01 PM Eastern Standard Time
DUBLIN, Calif.--(BUSINESS WIRE)--Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share for the 14 weeks ended February 3, 2018 of $1.19, up from $.77 in the 13 weeks ended January 28, 2017. Net earnings for the 14 weeks ended February 3, 2018 were $451 million, compared to $301 million in the 13 weeks ended January 28, 2017. Sales for the 2017 fourth quarter were up 16% to $4.1 billion. Comparable store sales for the 13 weeks ended January 27, 2018 rose 5% versus a 4% gain for the same period in the prior year.
“While we are encouraged by our recent strong sales and earnings results, we again face our own challenging multi-year comparisons as well as a very competitive retail environment. As a result, although we hope to do better, we continue to take a prudent approach to forecasting our business in 2018.”
53 weeks ended February 3, 2018 were $1.4 billion, compared to $1.1 billion in the 52 weeks ended January 28, 2017. Sales for the 53-week 2017 fiscal year grew 10% to $14.1 billion. Comparable store sales for the 52 weeks ended January 27, 2018 were up 4% on top of a 4% increase in 2016.
The aforementioned earnings results for both the 2017 fourth quarter and fiscal year are inclusive of a per share benefit of approximately $.10 from the 53rd week and $.21 from the recently enacted tax reform legislation. Excluding these items, earnings per share on a 52-week basis increased 14% for both the quarter and fiscal 2017 compared to the prior year.
Barbara Rentler, Chief Executive Officer, commented, “Despite our own difficult multi-year comparisons and a very competitive retail climate, sales and earnings were well ahead of our expectations for both the fourth quarter and the full year. We are pleased with these results, which reflect our ongoing success in delivering broad assortments of compelling bargains to today’s value-driven shoppers.”
Ms. Rentler continued, “Fourth quarter operating margin grew 95 basis points to 14.6%, up from 13.6% in the prior year. This improvement was driven by a combination of strong merchandise margin, expense leverage from solid gains in same store sales, and the impact of the 53rd week. For the 2017 fiscal year, operating margin increased 50 basis points to a record 14.5%.”
Board Approves Increases to 2018 Stock Repurchase Authorization and Quarterly Cash Dividend
The Company’s Board of Directors has approved an increase in the stock repurchase authorization for 2018 to $1.075 billion, up from the previous $875 million. The Board also approved a higher quarterly cash dividend of $.225 per share, up 41% over the prior year. This quarterly dividend is payable on March 30, 2018 to stockholders of record as of March 19, 2018.
A total of 13.5 million shares of common stock were repurchased during fiscal 2017, for an aggregate purchase price of $875 million. During the recently completed fourth quarter, 3.0 million shares were repurchased for a total price of $226 million.
Ms. Rentler noted, “The increases to our stock repurchase and dividend programs for 2018 reflect the current strength of our balance sheet and our ongoing ability to generate significant amounts of cash after funding growth and other capital needs of the business. We have repurchased stock as planned every year since 1993 and also raised our cash dividend annually since 1994. This consistent record reflects our ongoing commitment to enhancing stockholder value and returns.”
Fiscal 2018 Guidance
Looking ahead, Ms. Rentler said, “While we are encouraged by our recent strong sales and earnings results, we again face our own challenging multi-year comparisons as well as a very competitive retail environment. As a result, although we hope to do better, we continue to take a prudent approach to forecasting our business in 2018.”
For the 52 weeks ending February 2, 2019, the Company is forecasting same store sales to grow 1% to 2% on top of 4% gains in each of the past three years. We also plan to open about 100 new stores this year, consisting of 75 Ross Dress for Less and 25 dd’s DISCOUNTS locations. Fiscal 2018 earnings per share are projected to be $3.86 to $4.03, up from $3.55 for the 53 weeks ended February 3, 2018.
For the 13 weeks ending May 5, 2018, comparable store sales are forecast to be up 1% to 2%, with earnings per share projected to be $1.03 to $1.07, up from $.82 for the first quarter ended April 29, 2017.
Ms. Rentler noted, “Our fiscal year and first quarter 2018 guidance ranges include a per share benefit of approximately $.69 and $.16, respectively, from the recently enacted tax legislation. In addition, our 2018 ranges reflect our plans to make competitive wage and benefit-related investments, including raising our minimum wage to $11.00 per hour. We believe these actions will allow us to continue to attract and retain talented associates.”
The Company will host a conference call on Tuesday, March 6, 2018 at 4:15 p.m. Eastern time to provide additional details concerning its fourth quarter and fiscal year 2017 results, and management’s outlook and guidance for fiscal 2018. A real-time audio webcast of the conference call will be available in the Investors section of the Company’s website, located at
www.rossstores.com. An audio playback will be available at 404-537-3406, PIN #5783629 until 8:00 p.m. Eastern time on March 13, 2018, as well as on the Company’s website.
Ross Stores Reports Record Fourth Quarter and Fiscal 2017 Results | Business Wire
