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Ross Stores generates stronger-than-planned revenues
19
Mar '10
Ross Stores Inc reported earnings per share for the 13 weeks ended January 30, 2010 of $1.16, up 53% from $.76 for the 13 weeks ended January 31, 2009. Net earnings for the 13 weeks ended January 30, 2010 grew to a record $142.9 million, up 47% from $97.4 million for the 13 weeks ended January 31, 2009. Sales for the fourth quarter ended January 30, 2010 grew 14% to $1.980 billion, with comparable store sales up 10% over the prior year.

For the 52 weeks ended January 30, 2010, earnings per share grew 52% to $3.54, up from $2.33 for the 52 weeks ended January 31, 2009. Net earnings for the 2009 fiscal year ended January 30, 2010 grew 45% to a record $442.8 million, from $305.4 million for the 2008 fiscal year ended January 31, 2009. Sales for the 2009 fiscal year increased 11% to $7.184 billion, with comparable store sales up 6% on top of a 2% gain in the prior year.

Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "We are exceptionally pleased with our outstanding sales and earnings results for the fourth quarter and full year. During one of the most challenging economic and retail environments, we not only generated stronger-than-planned revenues, but did so with record merchandise gross margins that drove double digit operating profits as a percent of sales. The best performing merchandise categories for both the quarter and the year were Shoes, Dresses and Home, while geographic trends were broadbased, with all regions posting healthy comparable store sales gains for both periods."

Mr. Balmuth continued, "Earnings before interest and taxes for the 2009 fourth quarter grew about 260 basis points to 11.7% of sales, up from 9.1% in the prior year period. This higher profit margin was mainly due to a 230 basis point improvement in cost of goods sold along with a 30 basis point decline in selling, general and administrative costs. For the 2009 fiscal year, operating margin increased about 250 basis points over the prior year to 10.1% of sales, driven by a 230 basis point decline in cost of goods sold combined with a 20 basis point reduction in selling, general and administrative expenses. Key drivers of our improved profitability for both the fourth quarter and the year were much higher merchandise gross margin, lower shortage costs and leverage on operating expenses from the strong gains in same store sales."

"Healthy operating cash flows during the year continued to provide the resources to make capital investments in new store growth and infrastructure and fund our ongoing stock repurchase and dividend programs. During 2009, we repurchased a total of 7.4 million shares of common stock for an aggregate purchase price of $300 million, completing the two-year $600 million stock repurchase program announced in early 2008. In January 2010, our Board of Directors approved a new two-year $750 million stock repurchase program along with a 45% increase in our quarterly cash dividend to $.16 per common share. These actions reflect our confidence in the Company's ongoing ability to generate healthy amounts of excess cash and our commitment to enhancing stockholder returns," Mr. Balmuth said.

Looking ahead to 2010, Mr. Balmuth commented, "Our past results demonstrate that we can deliver consistent growth in both healthy and challenging economic climates if we execute our strategies well. This long-term record gives us the confidence to project strong cash flows from additional increases in both comparable store sales and earnings per share during 2010 and beyond."

Ross Stores Inc

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