Ross Stores : Quarterly report which provides a continuing view of a company's financial position

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

ý

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

For the quarterly period ended November 3, 2018

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

  For the transition period from __________ to __________

  Commission file number: 0-14678

Ross Stores, Inc.

(Exact name of registrant as specified in its charter)

Delaware	94-1390387
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)
5130 Hacienda Drive, Dublin, California	94568-7579
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code	[phone]
Former name, former address and former fiscal year, if	N/A
changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares of Common Stock, with $.01 par value, outstanding on November 21, 2018 was 370,588,820.

1

Ross Stores, Inc.

Form 10-Q Table of Contents

Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
Condensed Consolidated Statements of Earnings-Three and nine months ended November 3, 2018 and October 28, 2017	3
Condensed Consolidated Statements of Comprehensive Income-Three and nine months ended November 3, 2018 and October 28,
2017	4
Condensed Consolidated Balance Sheets-November 3, 2018, February 3, 2018, and October 28, 2017	5
Condensed Consolidated Statements of Cash Flows-Nine months ended November 3, 2018 and October 28, 2017	6
Notes to Condensed Consolidated Financial Statements	7
Report of Independent Registered Public Accounting Firm	15
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24
24
24
25
26
27

Item 1.

PART II. OTHER INFORMATION

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.

Exhibits

Signatures

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Earnings

Three Months Ended

($000, except stores and per share data, unaudited)

November 3, 2018

Sales

Costs and Expenses

Cost of goods sold

Selling, general and administrative Interest (income) expense, net

$

3,549,608$

2,547,331 561,577

Total costs and expenses

(2,953) 3,105,955

October 28, 2017

2018 October 28, 2017

3,328,894$

2,369,148 517,2971,780 2,888,225

Nine Months Ended

November 3,

10,876,153$ 10,066,926

7,736,533 7,120,056

1,640,5811,490,392

(4,849)

9,372,2658,617,738

7,290

Earnings before taxes Provision for taxes on earnings Net earnings

443,653105,545

$

338,108$

Earnings per share

Basic

Diluted

$ $

0.92

0.91$

440,669166,220

274,449$

$

0.72

0.72$

Weighted average shares outstanding (000)

Basic

Diluted

1,503,8881,449,188

358,124

537,182

1,145,764$ 912,006

$

3.09

3.06$ 2.36

$ 2.38

368,102371,061

379,432382,132

370,977382,959

373,936 385,823

Stores open at end of period

1,720

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

3

1,627

1,7201,627

Condensed Consolidated Statements of Comprehensive IncomeThree Months Ended

Nine Months Ended

($000, unaudited)
Net earnings	$	338,108$	274,449$	1,145,764$	912,006
Other comprehensive (loss) income:
Change in unrealized loss on investments, net of tax	(4)	(19)	(27)	(51)
Comprehensive income	$	338,104$	274,430$	1,145,737$	911,955

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

November 3, 2018

October 28, 2017

November 3, 2018

October 28, 2017

4

Condensed Consolidated Balance Sheets

($000, except share data, unaudited)	November 3, 2018	February 3, 2018	October 28, 2017
Assets
Current Assets
Cash and cash equivalents	$	1,349,196$	1,290,294$	1,144,169
Short-term investments	-	512	518
Accounts receivable	117,825	87,868	103,071
Merchandise inventory	1,979,080	1,641,735	1,840,225
Prepaid expenses and other	177,206	130,748	147,962
Total current assets	3,623,307	3,151,157	3,235,945
Property and Equipment
Land and buildings	1,117,801	1,109,173	1,112,212
Fixtures and equipment	2,719,545	2,603,318	2,538,349
Leasehold improvements	1,150,142	1,093,634	1,065,910
Construction-in-progress	146,323	102,054	92,264
5,133,811	4,908,179	4,808,735
Less accumulated depreciation and amortization	2,715,585	2,525,715	2,460,549
Property and equipment, net	2,418,226	2,382,464	2,348,186
Long-term investments	475	712	715
Other long-term assets	193,759	187,718	182,132
Total assets	$	6,235,767$	5,722,051$	5,766,978
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	1,394,029$	1,059,844$	1,289,620
Accrued expenses and other	455,743	431,706	445,728
Accrued payroll and benefits	317,525	349,879	320,894
Current portion of long-term debt	84,997	84,973	-
Total current liabilities	2,252,294	1,926,402	2,056,242
Long-term debt	312,328	311,994	396,848
Other long-term liabilities	371,844	348,541	325,587
Deferred income taxes	112,138	85,806	129,782
Commitments and contingencies
Stockholders' Equity
Common stock, par value $.01 per share
Authorized 1,000,000,000 shares
Issued and outstanding 371,058,000, 379,618,000
and 382,437,000 shares, respectively	3,711	3,796	3,824
Additional paid-in capital	1,354,669	1,292,364	1,272,056
Treasury stock	(371,959)	(318,279)	(318,279)
Accumulated other comprehensive income	-	27	40
Retained earnings	2,200,742	2,071,400	1,900,878
Total stockholders' equity	3,187,163	3,049,308	2,858,519
Total liabilities and stockholders' equity	$	5,766,978

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

6,235,767

$

5,722,051

$

5