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| Ross Stores Reports First Quarter Results |
NEWARK, Calif., May 23 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported net earnings for the 13 weeks ended May 5, 2001 of $34.7 million, compared to $40.8 million for the 13 weeks ended April 29, 2000. Earnings per share for the first quarter of 2001 declined 9% to $.43, compared to record earnings per share of $.47 in the first quarter of 2000, which were up a strong 27% over the same period in 1999. First quarter sales in 2001 totaled $674 million, up 6% from the $633 million in sales for the quarter ended April 29, 2000. Comparable store sales for the same period declined 3% versus a strong 7% increase in the first quarter of 2000. Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "During the first quarter of 2001, our business was negatively affected by a difficult economic backdrop, unseasonable weather trends and some residual issues related to our merchandising missteps that developed in 2000. Looking ahead, we expect our sales and earnings momentum to improve over the balance of the year for several reasons. We believe that our merchandise assortments have improved over the past several months, weather becomes less of an issue in the second quarter and we begin to have easier prior year sales comparisons starting in June." Mr. Balmuth continued, "Tight inventory controls helped to maintain in-store turns and to minimize markdowns. Gross margin declined 30 basis points during the first quarter, mainly due to loss of leverage on fixed occupancy costs that are included in cost of goods sold. General, selling and administrative expenses rose about 150 basis points, primarily due to loss of leverage from the decline in same store sales and higher store payroll, benefit and distribution expenses. As a result, operating margin for the first quarter fell to 8.7%, compared to 10.6% for the same period in 2000." Mr. Balmuth continued, "During the first three months of 2001, we repurchased 1.6 million shares of common stock for an aggregate investment of $33 million. We have now repurchased a total of $203 million of common stock under the two-year $300 million repurchase program authorization announced at the beginning of fiscal 2000. We ended the quarter with 79.8 million shares of common stock outstanding. "Our accelerated expansion program remained on schedule during the quarter. We opened ten new stores, including the first two locations in our new market of Atlanta, Georgia. These ten new locations are the first of approximately 40 net new stores we plan to open in 2001, including a total of 11 to 12 stores in our new southeast markets. We currently expect to end the year with about 450 stores in 20 states," said Mr. Balmuth. The company will provide additional details concerning its first quarter results and business outlook on a conference call to be held on Wednesday, May 23, 2001 at 11:00 a.m. Eastern Daylight Time. Participants may listen to a real time audio webcast of the conference call by visiting the company's web site located at http://www.rossstores.com. A recorded version of the call will also be available until the end of the month at the web site address and via a telephone recording through May 30, 2001 at 402-220-5900, PIN #2342. Forward-Looking Statements: This press release contains certain forward-looking statements which are subject to risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. The words "expect," "anticipate," "estimate," "believe" and similar expressions identify forward-looking statements. Risk factors include obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, unseasonable weather trends, and greater than planned operating costs. Other risk factors are detailed in the company's Form 10-K for fiscal 2000. The company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes indicate that any projected results expressed or implied therein will not be realized. Ross Stores, Inc. operates a national chain of off-price retail stores offering first quality, in-season, branded apparel and apparel-related merchandise for the entire family at prices that average 20% to 60% less than department and specialty stores, as well as merchandise for the home at similar savings. The company had 419 stores in operation as of May 5, 2001, compared to 385 stores at the end of the same period last year. ROSS STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended May 5, April 29, ($000, except per share data, unaudited) 2001 2000 Sales $674,359 $633,428 Costs and Expenses Cost of goods sold and occupancy 464,529 434,425 General, selling and administrative 139,237 121,446 Depreciation and amortization 11,999 10,478 Interest expense 1,655 5 617,420 566,354 Earnings before income taxes 56,939 67,074 Provision for taxes on earnings 22,263 26,226 Net earnings $34,676 $40,848 Earnings per share Basic $0.43 $0.48 Diluted $0.43 $0.47 Weighted average shares outstanding Basic 80,276 85,287 Diluted 81,051 86,177 Stores open end of period 419 385 ROSS STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS May 5, April 29, ($000, unaudited) 2001 2000 ASSETS Current Assets Cash and cash equivalents $38,282 $32,632 Accounts receivable 20,658 17,003 Merchandise inventory 607,252 555,619 Other current assets 21,992 19,068 Total Current Assets $688,184 $624,322 Property and equipment, net 306,332 276,143 Lease rights, deferred income taxes and other assets 40,110 63,665 $1,034,626 $964,130 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable, accrued expenses and other $447,941 $445,077 Income taxes payable 21,577 24,802 Total Current Liabilities $469,518 $469,879 Long-term debt 50,000 20,000 Other liabilities 41,371 54,762 Stockholders' Equity 473,737 419,489 $1,034,626 $964,130SOURCE Ross Stores, Inc.
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Company News On-Call:
800-758-5804, ext. 764175
CONTACT:
John G. Call, Senior Vice President, Chief
Financial Officer 510-505-4315, or Katie Loughnot, Director,
Investor Relations, 510-505-4509, or katie.loughnot@ros.comm,
both of Ross Stores, Inc.
