Ross Stores, Inc. reported sales for the four weeks ended February 1, 2003 of $196 million, up 7% from the $183 million reported for the four weeks ended February 2, 2002. Comparable store sales for the four weeks ended February 1, 2003 declined 2% compared to a 12% increase in the prior year.
For the 13 weeks ended February 1, 2003, sales increased 14% to $965 million from $848 million for the 13 weeks ended February 2, 2002. Comparable store sales for the 13 weeks ended February 1, 2003 rose 3% on top of an 8% increase in the prior year.
For the 52 weeks ended February 1, 2003, sales totaled $3.531 billion, an 18% increase above the $2.987 billion in sales for the 52 weeks ended February 2, 2002. Comparable store sales for the 52 weeks ended February 1, 2003 increased 7% on top of a 3% gain in the prior year.
Despite lower than anticipated sales in January, the company said it continued to expect to report earnings per share of $.74 and $2.52, respectively, for the 13 and 52 weeks ended February 1, 2003.
Board Approves 21% Increase in Quarterly Dividend
“Our strong financial position and confidence in future operating cash flows allow us to continue to enhance stockholder returns through our share repurchase and dividend programs,” said Michael Balmuth, Vice Chairman and Chief Executive Officer. “I am pleased to report that the company’s Board of Directors declared a 21% increase in the quarterly cash dividend to $.0575 per common share, the ninth consecutive annual increase in quarterly dividend payments since this program began in early 1994. A quarterly cash dividend declared by the Board at the new higher rate will be paid on or about April 1, 2003 to stockholders of record as of February 28, 2003.”
Mr. Balmuth continued, “In addition, during 2002, the company repurchased 3.8 million shares of common stock for an aggregate purchase price of $150 million. This buyback was effected under a two-year, $300 million program authorized by the Board of Directors at the beginning of 2002. We expect to complete the remaining $150 million stock repurchase authorization in 2003.”
January Sales
“Although we are pleased with our fourth quarter and fiscal 2002 performance, we are disappointed with January sales results. We believe that the combination of our own low levels of seasonal clearance following our strong performance in December, intensely cold weather in certain markets and very aggressive department store promotions of seasonal apparel negatively impacted our business in January. The weakness was mainly in apparel categories and was partially offset by continued strength in less weather sensitive businesses such as Home and Shoes,” said Mr. Balmuth.
Fourth Quarter and Fiscal 2002 Estimates
Mr. Balmuth continued, “As noted earlier in this press release, we are reiterating our forecast of $.74 and $2.52 in earnings per share for the 13 and 52 weeks ended February 1, 2003. These estimates represent respective increases of 19% and 32% over the prior year results of $.62 and $1.91 for the 13 and 52 weeks ended February 2, 2002. We expect fourth quarter operating margin to expand about 30 basis points over the prior year. Merchandise gross margin is projected to decline slightly as sharper pricing and higher freight costs are expected to be partially offset by lower markdowns and better inventory shortage results. Improved general, selling and administrative costs as a percent of sales are forecast to more than offset the decline in gross margin, partly due to lower benefit costs as a percent of sales compared to the prior year quarter. We plan to report final earnings results for the fourth quarter and fiscal 2002 on Wednesday, March 19, 2003.”
Looking ahead to 2003, Mr. Balmuth commented, “We remain confident about our ability to achieve 15% or better annual increases in earnings per share over the long term. However, the recent uncertainty surrounding the economy and geo-political events and their impact on consumer behavior makes us slightly more cautious in the near term. As a result, for the 52 weeks ending January 31, 2004, we currently are forecasting same store sales gains of 2% to 3% and earnings per share increases of 11% to 15%, for an estimated range of $2.80 to $2.90. In addition, we continue to plan to open 62 new locations for 12% store growth in 2003.”
Mr. Balmuth continued, “In planning the first quarter, we also took into consideration the difficult prior year comparisons, the later Easter holiday this year and the weather risk to early spring apparel sales. For the 13 weeks ending May 3, 2003, we currently expect flattish comparable store sales and are targeting earnings per share to be in the range of $.62 to $.65, compared to $.59 for the 13 weeks ended May 4, 2002.”
