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Ross Stores - $ROST - Earnings Analysis: Strong cash position of $4.7 billion.

By sagebytes in Lifestyle —

Business Model

Ross Stores operates Ross Dress for Less and dd's DISCOUNTS. Ross offers in-season, name brand apparel, accessories, footwear, and home fashions at savings of 20% to 60% off department and specialty store regular prices. dd’s DISCOUNTS features a more moderately-priced assortment at savings of 20% to 70% off moderate department and discount store regular prices.

Revenue Sources

  • Sales from Ross Dress for Less stores.
  • Sales from dd's DISCOUNTS stores.

Income Statement Analysis

  • Sales decreased by 1.83% year-over-year.
  • Net earnings decreased by 3.76% year-over-year.
  • Earnings per share (diluted) decreased by 1.65% year-over-year.

Balance Sheet Analysis

  • Cash and cash equivalents decreased by 2.91%.
  • Total assets increased by 4.23%.
  • Total stockholders' equity increased by 13.09%.
  • Total liabilities decreased by 0.35%.

Cash Flow Analysis

  • Net cash provided by operating activities decreased by 6.26%.
  • Net cash used in investing activities decreased by 16.43%.
  • Net cash used in financing activities increased by 29.41%.
  • Net decrease in cash, cash equivalents, and restricted cash and cash equivalents decreased significantly.

Capital Allocation

The Board of Directors authorized a 10% increase in the Company’s quarterly cash dividend to $0.405 per share. During the recently completed fourth quarter, 1.7 million shares were repurchased for a total price of $262 million. For fiscal 2024, a total of 7.3 million shares of common stock were repurchased for an aggregate purchase price of $1.05 billion. The company expects to complete the $1.05 billion remaining under this authorization in fiscal 2025.

Management Commentary

Fourth quarter sales and earnings results were at the high end of our expectations.

We ended the year with $4.7 billion of cash after funding the growth and capital needs of our business.

Sales trends began softening later in January and into February.

We believe a combination of unseasonable weather and heightened volatility in the macroeconomic and geopolitical environments has negatively impacted customer traffic.

Overall Sentiment: Cautious due to softening sales trends and macroeconomic uncertainty, but positive about the long-term prospects and financial position.

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results. Investing in securities involves risks, including potential loss of principal.