QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
Commission file number: |
(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) | ||||||||||||||||
organization) | |||||||||||||||||
| |||||||||||||||||
(Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code |
Title of each class | Trading symbol | Name of each exchange on which registered | |||||||||||||||
par value $.01 |
Page | ||||||||||||||
Item 1. | ||||||||||||||
Condensed Consolidated Statements of Earnings–Three and nine months ended October 29, 2022 and October 30, 2021 | ||||||||||||||
Condensed Consolidated Statements of Comprehensive Income–Three and nine months ended October 29, 2022 and October 30, 2021 | ||||||||||||||
Condensed Consolidated Balance Sheets–October 29, 2022, January 29, 2022, and October 30, 2021 | ||||||||||||||
Condensed Consolidated Statements of Stockholders’ Equity–Nine months ended October 29, 2022 and October 30, 2021 | ||||||||||||||
Condensed Consolidated Statements of Cash Flows–Nine months ended October 29, 2022 and October 30, 2021 | ||||||||||||||
Item 2. | ||||||||||||||
Item 3. | ||||||||||||||
Item 4. | ||||||||||||||
Item 1. | ||||||||||||||
Item 1A. | ||||||||||||||
Item 2. | ||||||||||||||
Item 6. | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
($000, except stores and per share data, unaudited) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||
Sales | $ | $ | $ | $ | |||||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Interest (income) expense, net | ( | ||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Earnings before taxes | |||||||||||||||||||||||
Provision for taxes on earnings | |||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average shares outstanding (000) | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Store count at end of period | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
($000, unaudited) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
($000, except share data, unaudited) | October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||
Assets | |||||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Accounts receivable | |||||||||||||||||
Merchandise inventory | |||||||||||||||||
Prepaid expenses and other | |||||||||||||||||
Total current assets | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Land and buildings | |||||||||||||||||
Fixtures and equipment | |||||||||||||||||
Leasehold improvements | |||||||||||||||||
Construction-in-progress | |||||||||||||||||
Less accumulated depreciation and amortization | |||||||||||||||||
Property and equipment, net | |||||||||||||||||
Operating lease assets | |||||||||||||||||
Other long-term assets | |||||||||||||||||
Total assets | $ | $ | $ | ||||||||||||||
Liabilities and Stockholders’ Equity | |||||||||||||||||
Current Liabilities | |||||||||||||||||
Accounts payable | $ | $ | $ | ||||||||||||||
Accrued expenses and other | |||||||||||||||||
Current operating lease liabilities | |||||||||||||||||
Accrued payroll and benefits | |||||||||||||||||
Income taxes payable | |||||||||||||||||
Current portion of long-term debt | |||||||||||||||||
Total current liabilities | |||||||||||||||||
Long-term debt | |||||||||||||||||
Non-current operating lease liabilities | |||||||||||||||||
Other long-term liabilities | |||||||||||||||||
Deferred income taxes | |||||||||||||||||
Commitments and contingencies | |||||||||||||||||
Stockholders’ Equity | |||||||||||||||||
Common stock, par value $ Authorized Issued and outstanding and | |||||||||||||||||
Additional paid-in capital | |||||||||||||||||
Treasury stock | ( | ( | ( | ||||||||||||||
Retained earnings | |||||||||||||||||
Total stockholders’ equity | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | $ | $ |
Nine Months Ended October 29, 2022 | ||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained earnings | |||||||||||||||||||||||||||||||||||
(000) | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||
Balance at January 29, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | ( | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased | ( | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at April 30, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | ( | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased | ( | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at July 30, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | ( | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased | ( | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at October 29, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
Nine Months Ended October 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Treasury stock | Retained earnings | |||||||||||||||||||||||||||||||||||
(000) | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||
Balance at January 30, 2021 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | ( | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at May 01, 2021 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | — | ( | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased | ( | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at July 31, 2021 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issued under stock | ||||||||||||||||||||||||||||||||||||||
plans, net of shares | ||||||||||||||||||||||||||||||||||||||
used for tax withholding | ( | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased | ( | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at October 30, 2021 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements. |
Nine Months Ended | |||||||||||
($000, unaudited) | October 29, 2022 | October 30, 2021 | |||||||||
Cash Flows From Operating Activities | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Change in assets and liabilities: | |||||||||||
Merchandise inventory | ( | ( | |||||||||
Other current assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Other current liabilities | ( | ||||||||||
Income taxes | ( | ||||||||||
Operating lease assets and liabilities, net | |||||||||||
Other long-term, net | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash Flows From Investing Activities | |||||||||||
Additions to property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows From Financing Activities | |||||||||||
Issuance of common stock related to stock plans | |||||||||||
Treasury stock purchased | ( | ( | |||||||||
Repurchase of common stock | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | ( | ||||||||||
Cash, cash equivalents, and restricted cash and cash equivalents: | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ | |||||||||
Supplemental Cash Flow Disclosures | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | $ | $ | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||
Ladies | % | % | % | % | |||||||||||||||||||
Home Accents and Bed and Bath | % | % | % | % | |||||||||||||||||||
Men’s | % | % | % | % | |||||||||||||||||||
Accessories, Lingerie, Fine Jewelry, and Cosmetics | % | % | % | % | |||||||||||||||||||
Shoes | % | % | % | % | |||||||||||||||||||
Children’s | % | % | % | % | |||||||||||||||||||
Total | % | % | % | % | |||||||||||||||||||
($000) | October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Restricted cash and cash equivalents included in: | |||||||||||||||||
Prepaid expenses and other | |||||||||||||||||
Other long-term assets | |||||||||||||||||
Total restricted cash and cash equivalents | |||||||||||||||||
Total cash, cash equivalents, and restricted cash and cash equivalents | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
($000) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||
Operating lease assets obtained in exchange for operating lease liabilities | $ | $ | $ | $ |
($000) | October 29, 2022 | January 29, 2022 | October 30, 2021 | |||||||||||||||||
Cash and cash equivalents (Level 1) | $ | $ | $ | |||||||||||||||||
Restricted cash and cash equivalents (Level 1) | $ | $ | $ | |||||||||||||||||
($000) | October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||
Level 1 | $ | $ | $ | ||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
($000) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||
Restricted stock | $ | $ | $ | $ | |||||||||||||||||||
Performance awards | |||||||||||||||||||||||
Employee stock purchase plan | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
Statements of Earnings Classification ($000) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
(000, except per share data) | Number of shares | Weighted-average grant date fair value | |||||||||
Unvested at January 29, 2022 | $ | ||||||||||
Awarded | |||||||||||
Released | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at October 29, 2022 | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
Shares in (000s) | Basic EPS | Effect of dilutive common stock equivalents | Diluted EPS | Basic EPS | Effect of dilutive common stock equivalents | Diluted EPS | ||||||||||||||||||||||||||||||||
October 29, 2022 | ||||||||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||||||||
Amount | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
October 30, 2021 | ||||||||||||||||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||||||||||||||||
Amount | $ | $ | ( | $ | $ | $ | ( | $ |
($000) | October 29, 2022 | January 29, 2022 | October 30, 2021 | |||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Total long-term debt | $ | $ | $ | |||||||||||||||||
Less: current portion | ||||||||||||||||||||
Total due beyond one year | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
($000) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||||
Interest expense on long-term debt | $ | $ | $ | |||||||||||||||||||||||
Other interest expense | ||||||||||||||||||||||||||
Capitalized interest | ( | ( | ( | ( | ||||||||||||||||||||||
Interest income | ( | ( | ( | ( | ||||||||||||||||||||||
Interest (income) expense, net | $ | ( | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||||||||
Sales (millions) | $ | 4,566 | $ | 4,575 | $ | 13,482 | $ | 13,896 | ||||||||||||||||||||||||
Comparable store sales (decline) growth | (3 | %) | 1 | 14 | % | 2 | (5 | %) | 1 | 14 | % | 2 | ||||||||||||||||||||
Costs and expenses (as a percent of sales) | ||||||||||||||||||||||||||||||||
Cost of goods sold | 75.0 | % | 72.7 | % | 74.3 | % | 71.5 | % | ||||||||||||||||||||||||
Selling, general and administrative | 15.2 | % | 15.9 | % | 15.1 | % | 15.2 | % | ||||||||||||||||||||||||
Interest (income) expense, net | (0.1 | %) | 0.4 | % | 0.2 | % | 0.4 | % | ||||||||||||||||||||||||
Earnings before taxes (as a percent of sales) | 9.9 | % | 11.0 | % | 10.4 | % | 12.9 | % | ||||||||||||||||||||||||
Net earnings (as a percent of sales) | 7.5 | % | 8.4 | % | 7.9 | % | 9.8 | % | ||||||||||||||||||||||||
1 Amounts shown are for the three and nine month periods of fiscal 2022 compared to the same periods of fiscal 2021 for stores that have been open for more than 14 complete months. | ||||||||||||||||||||||||||||||||
2 Amounts shown are for the three and nine month periods of fiscal 2021 compared to the same periods of fiscal 2019. Comparable store sales for this purpose represents sales from stores that were open at the end of fiscal 2018, plus new stores opened in fiscal 2019, less stores closed in fiscal 2019 and fiscal 2020. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
Store Count | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||||
Beginning of the period | 1,980 | 1,896 | 1,923 | 1,859 | ||||||||||||||||||||||
Opened in the period | 40 | 28 | 99 | 65 | ||||||||||||||||||||||
Closed in the period | (1) | — | (3) | 1 | — | |||||||||||||||||||||
End of the period | 2,019 | 1,924 | 2,019 | 1,924 | ||||||||||||||||||||||
1 Includes a temporary closure of a store impacted by a weather event. | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||
Ladies | 25 | % | 26 | % | 25 | % | 26 | % | |||||||||||||||
Home Accents and Bed and Bath | 25 | % | 25 | % | 25 | % | 25 | % | |||||||||||||||
Men’s | 15 | % | 15 | % | 15 | % | 14 | % | |||||||||||||||
Accessories, Lingerie, Fine Jewelry, and Cosmetics | 13 | % | 13 | % | 13 | % | 14 | % | |||||||||||||||
Shoes | 13 | % | 11 | % | 13 | % | 12 | % | |||||||||||||||
Children’s | 9 | % | 10 | % | 9 | % | 9 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
($000) | October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||||
Interest expense on long-term debt | $ | 21,150 | $ | 22,227 | $ | 63,429 | $ | 66,626 | ||||||||||||||||||
Other interest expense | 448 | 391 | 1,242 | 1,012 | ||||||||||||||||||||||
Capitalized interest | (663) | (3,682) | (4,489) | (10,511) | ||||||||||||||||||||||
Interest income | (23,737) | (192) | (34,621) | (627) | ||||||||||||||||||||||
Interest (income) expense, net | $ | (2,802) | $ | 18,744 | $ | 25,561 | $ | 56,500 |
Nine Months Ended | |||||||||||
($000) | October 29, 2022 | October 30, 2021 | |||||||||
Cash provided by operating activities | $ | 472,667 | $ | 1,503,653 | |||||||
Cash used in investing activities | (417,901) | (377,916) | |||||||||
Cash used in financing activities | (1,070,415) | (759,965) | |||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | $ | (1,015,649) | $ | 365,772 |
($000) | Less than one year | Greater than one year | Total¹ | ||||||||||||||
Recorded contractual obligations: | |||||||||||||||||
Senior notes | $ | — | $ | 2,474,991 | $ | 2,474,991 | |||||||||||
Operating leases | 684,692 | 2,611,399 | 3,296,091 | ||||||||||||||
New York buying office ground lease2 | 7,552 | 1,111,490 | 1,119,042 | ||||||||||||||
Unrecorded contractual obligations: | |||||||||||||||||
Real estate obligations3 | 7,343 | 197,130 | 204,473 | ||||||||||||||
Interest payment obligations | 80,316 | 435,134 | 515,450 | ||||||||||||||
Purchase obligations4 | 3,617,969 | 136,049 | 3,754,018 | ||||||||||||||
Total contractual obligations | $ | 4,397,872 | $ | 6,966,193 | $ | 11,364,065 | |||||||||||
1 We have a $67.6 million liability for unrecognized tax benefits that is included in Other long-term liabilities on our interim Condensed Consolidated Balance Sheet. This liability is excluded from the schedule above as the timing of payments cannot be reasonably estimated. | |||||||||||||||||
2 Our New York buying office building is subject to a 99-year ground lease. | |||||||||||||||||
3 Minimum lease payments for leases signed that have not yet commenced. | |||||||||||||||||
4 Purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects, store fixtures and supplies, and information technology services, transportation, and maintenance contracts. |
Total number of shares (or units) purchased1 | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs ($000)2 | ||||||||||||||||||||
Period | |||||||||||||||||||||||
August | |||||||||||||||||||||||
(7/31/2022 - 8/27/2022) | 719,413 | $86.12 | 719,413 | $ | 1,363,044 | ||||||||||||||||||
September | |||||||||||||||||||||||
(8/28/2022 - 10/01/2022) | 1,195,691 | $88.27 | 1,124,640 | $ | 1,263,915 | ||||||||||||||||||
October | |||||||||||||||||||||||
(10/02/2022- 10/29/2022) | 951,184 | $87.19 | 947,391 | $ | 1,181,307 | ||||||||||||||||||
Total | 2,866,288 | $87.37 | 2,791,444 | $ | 1,181,307 |
Exhibit | |||||
Number | Exhibit | ||||
3.1 | |||||
3.2 | |||||
15 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | XBRL Instance Document. (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.) | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | ||||
104 | Cover Page Interactive Data File. (The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.) |
ROSS STORES, INC. | |||||||||||
(Registrant) | |||||||||||
Date: | December 6, 2022 | By: | /s/Adam Orvos | ||||||||
Adam Orvos | |||||||||||
Executive Vice President, Chief Financial Officer |
Date: | December 6, 2022 | /s/Barbara Rentler | ||||||
Barbara Rentler | ||||||||
Chief Executive Officer |
Date: | December 6, 2022 | /s/Adam Orvos | ||||||
Adam Orvos | ||||||||
Executive Vice President, Chief Financial Officer |
Date: | December 6, 2022 | /s/Barbara Rentler | ||||||
Barbara Rentler | ||||||||
Chief Executive Officer |
Date: | December 6, 2022 | /s/Adam Orvos | ||||||
Adam Orvos | ||||||||
Executive Vice President, Chief Financial Officer |
Condensed Consolidated Statements of Earnings shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 29, 2022
USD ($)
number_of_store
$ / shares
shares
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Oct. 30, 2021
USD ($)
number_of_store
$ / shares
shares
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Oct. 29, 2022
USD ($)
number_of_store
$ / shares
shares
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Oct. 30, 2021
USD ($)
number_of_store
$ / shares
shares
|
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Income Statement [Abstract] | ||||
Sales | $ 4,565,489 | $ 4,574,541 | $ 13,481,598 | $ 13,895,595 |
Costs and Expenses | ||||
Cost of goods sold | 3,424,046 | 3,326,004 | 10,020,027 | 9,935,271 |
Selling, general and administrative | 693,367 | 725,761 | 2,029,926 | 2,118,602 |
Interest (income) expense, net | (2,802) | 18,744 | 25,561 | 56,500 |
Total costs and expenses | 4,114,611 | 4,070,509 | 12,075,514 | 12,110,373 |
Earnings before taxes | 450,878 | 504,032 | 1,406,084 | 1,785,222 |
Provision for taxes on earnings | 108,842 | 119,002 | 341,086 | 429,455 |
Net earnings | $ 342,036 | $ 385,030 | $ 1,064,998 | $ 1,355,767 |
Earnings per share | ||||
Basic (in dollars per share) | $ / shares | $ 1.00 | $ 1.10 | $ 3.09 | $ 3.85 |
Diluted (in dollars per share) | $ / shares | $ 1.00 | $ 1.09 | $ 3.08 | $ 3.82 |
Weighted-average shares outstanding (000) | ||||
Basic (in shares) | shares | 342,120 | 351,071 | 344,686 | 352,308 |
Diluted (in shares) | shares | 343,720 | 353,081 | 346,212 | 354,477 |
Store count at end of period (in number of stores) | number_of_store | 2,019 | 1,924 | 2,019 | 1,924 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
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Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 342,036 | $ 385,030 | $ 1,064,998 | $ 1,355,767 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Comprehensive income | $ 342,036 | $ 385,030 | $ 1,064,998 | $ 1,355,767 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
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Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 344,808,000 | 351,720,000 | 353,694,000 |
Common stock, shares outstanding (in shares) | 344,808,000 | 351,720,000 | 353,694,000 |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
1 Months Ended | 3 Months Ended | |||||||||||
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Aug. 31, 2022 |
May 31, 2022 |
Mar. 31, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
May 31, 2021 |
Mar. 31, 2021 |
Oct. 29, 2022 |
Jul. 30, 2022 |
Apr. 30, 2022 |
Oct. 30, 2021 |
Jul. 31, 2021 |
May 01, 2021 |
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Statement of Stockholders' Equity [Abstract] | |||||||||||||
Dividends declared (in dollars per share) | $ 0.310 | $ 0.310 | $ 0.310 | $ 0.285 | $ 0.285 | $ 0.285 | $ 0.285 | $ 0.310 | $ 0.310 | $ 0.310 | $ 0.285 | $ 0.285 | $ 0.285 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of October 29, 2022 and October 30, 2021, the results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021. The Condensed Consolidated Balance Sheet as of January 29, 2022, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022. The results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Use of accounting estimates. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, and legal claims. The uncertainties and potential impacts from inflation, the Russia-Ukraine conflict, and the ongoing COVID-19 pandemic increase the challenge of making these estimates; actual results could differ materially from the Company’s estimates. Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three and nine month periods ended October 29, 2022 and October 30, 2021:
Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less. Restricted cash, cash equivalents, and investments. Restricted cash, cash equivalents, and investments serve as collateral for certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:
Property and equipment. As of October 29, 2022 and October 30, 2021, the Company had $30.2 million and $14.4 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and equipment, Accounts payable, and Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets. Operating leases. Supplemental cash flow disclosures related to operating lease assets obtained in exchange for operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) were as follows:
Cash dividends. The Company’s Board of Directors declared a cash dividend of $0.310 per common share in March, May, and August 2022, and $0.285 per common share in March, May, August, and November 2021. On November 16, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.310 per common share, payable on December 30, 2022. Stock repurchase program. In March 2022, the Company's Board of Directors approved a new two-year program to repurchase up to $1.9 billion of the Company's common stock through fiscal 2023. This new program replaced the previous $1.5 billion stock repurchase program, effective at the end of fiscal 2021 (at which time the Company had repurchased $650 million of stock under the $1.5 billion program). The Company repurchased 8.2 million shares of common stock for $718.7 million during the nine month period ended October 29, 2022. The Company repurchased 3.5 million shares of common stock for $417.0 million during the nine month period ended October 30, 2021. Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violation of wage and hour/employment laws and consumer protection laws. Class/representative action litigation remains pending as of October 29, 2022. The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company may include commercial, product and product safety, consumer, intellectual property, environmental, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, and/or local laws. Actions against the Company are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. In the opinion of management, the resolution of pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Recently issued accounting standards. In September 2022, the FASB issued Accounting Standards Update (ASU) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, to enhance transparency about an entity's use of supplier finance programs. The ASU requires enhanced and additional disclosures about the key terms of supplier finance programs including a description of where in the financial statements any related amounts are presented. The initial guidance in the ASU will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase the transparency of the effects of government assistance, including disclosure of the types of assistance an entity receives, an entity’s method of accounting for government assistance, and the effect of government assistance on an entity’s financial statements. The guidance in this ASU will be effective for the Company for its fiscal 2022 Form 10-K. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The inputs used to measure fair value include: Level 1, observable inputs such as quoted prices in active markets; Level 2, inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, unobservable inputs in which little or no market data exists. This fair value hierarchy requires the Company to develop its own assumptions, maximize the use of observable inputs, and minimize the use of unobservable inputs when measuring fair value. Corporate, U.S. government and agency, and mortgage-backed securities are classified within Level 1 or Level 2 because these securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The fair value of the Company’s financial instruments are as follows:
The underlying assets in the Company’s non-qualified deferred compensation program as of October 29, 2022, January 29, 2022, and October 30, 2021 (included in Other long-term assets and in Other long-term liabilities) primarily consist of participant-directed money market, stock, and bond funds. The fair value measurement for funds with quoted market prices in active markets (Level 1) are as follows:
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Management Incentive Plan and Stock-Based Compensation |
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Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Management Incentive Plan and Stock-Based Compensation | Management Incentive Plan and Stock-Based Compensation The Company has incentive compensation programs which provide cash incentive bonuses and performance share awards to key management and employees based on Company and individual performance. For fiscal 2022, the Compensation Committee of the Board of Directors established the performance measures for determining cash incentive bonuses and performance share awards based on profitability-based performance goals. For fiscal 2021, the Compensation Committee of the Board of Directors established the performance measures for determining cash incentive bonuses and performance share awards based on profitability-based performance goals and the attainment of specific management priorities related to business challenges from the COVID-19 pandemic, as measured and approved by the Compensation Committee. Stock-based compensation. For the three and nine month periods ended October 29, 2022 and October 30, 2021, the Company recognized stock-based compensation expense as follows:
Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and nine month periods ended October 29, 2022 and October 30, 2021, is as follows:
The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 29, 2022 were $6.1 million and $18.9 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 30, 2021 were $8.4 million and $19.4 million, respectively. Restricted stock awards. The Company grants shares of restricted stock or restricted stock units to directors, officers, and key employees. The market value of shares of restricted stock and restricted stock units at the date of grant is amortized to expense over the vesting period of generally to five years. During the three and nine month periods ended October 29, 2022 and October 30, 2021, shares purchased by the Company for tax withholding totaled 74,844 and 490,060, and 70,488 and 471,081, respectively, and are considered treasury shares which are available for reissuance. Performance share awards. The Company has a performance share award program for senior executives. A performance share award represents a right to receive shares of restricted stock on a specified settlement date based on the Company’s attainment of performance goals during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally to three years from the date the performance award was granted. As of October 29, 2022, shares related to unvested restricted stock, restricted stock units, and performance share awards totaled 4.5 million shares. A summary of restricted stock, restricted stock units, and performance share award activity for the nine month period ended October 29, 2022, is presented below:
The unamortized compensation expense at October 29, 2022 was $213.6 million, which is expected to be recognized over a weighted-average remaining period of 2.0 years. The unamortized compensation expense at October 30, 2021, was $193.8 million, which was expected to be recognized over a weighted-average remaining period of 2.1 years. Employee stock purchase plan. Under the Employee Stock Purchase Plan (“ESPP”), eligible employees participating in the quarterly offering period can choose to have up to the lesser of 10% of their annual base earnings or the IRS annual share purchase limit of $25,000 in aggregate market value to purchase the Company’s common stock. The purchase price of the stock is 85% of the closing market price on the date of purchase. Purchases occur on a quarterly basis (on the last trading day of each calendar quarter). The Company recognizes expense for ESPP purchase rights equal to the value of the 15% discount given on the purchase date.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company computes and reports both basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period, except in cases where the effect of the common stock equivalents would be anti-dilutive. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units. For the three and nine month periods ended October 29, 2022, approximately 85,000 and 492,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively, because their effect would have been anti-dilutive for the periods presented. For the three and nine month periods ended October 30, 2021, approximately 13,200 and 3,000 weighted-average shares were excluded from the calculation of diluted EPS, respectively, because their effect would have been anti-dilutive for the periods presented. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Long-term debt. Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:
As of October 29, 2022, January 29, 2022, and October 30, 2021, total unamortized discount and debt issuance costs were $19.5 million, $22.7 million, and $23.7 million, respectively, and were classified as a reduction of Long-term debt. As of October 29, 2022 and January 29, 2022 the aggregate fair value of the seven outstanding series of Senior Notes was approximately $2.2 billion and $2.6 billion, respectively. As of October 30, 2021 the aggregate fair value of the then eight outstanding series of Senior Notes was approximately $2.6 billion. The fair value is estimated by obtaining comparable market quotes which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance. See Note D: Debt, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022, for additional information regarding the terms of the Company’s unsecured senior notes. Revolving credit facilities. In February 2022, the Company entered into a new, $1.3 billion senior unsecured revolving Credit Agreement (the “2022 Credit Facility”), which replaced its previous $800 million unsecured revolving credit facility. The 2022 Credit Facility expires in February 2027, and may be extended, at the Company's request and with the consent of the lenders, for up to two additional one year periods, subject to customary conditions. The new facility contains a $300 million sublimit for issuance of standby letters of credit. It also contains an option allowing the Company to increase the size of its credit facility by up to an additional $700 million, with the agreement of the committing lenders. The interest rate on borrowings under the 2022 Credit Facility is a term rate based on the Secured Overnight Financing Rate (“Term SOFR”) (or an alternate benchmark rate, if Term SOFR is no longer available) plus an applicable margin, and is payable quarterly and upon maturity. The 2022 Credit Facility is subject to a quarterly Consolidated Adjusted Debt to Consolidated EBITDAR financial leverage ratio covenant. As of October 29, 2022, the Company was in compliance with this financial covenant. As of October 29, 2022, the Company had no borrowings or standby letters of credit outstanding under the 2022 Credit Facility, and the $1.3 billion credit facility remains in place and available. The table below shows the components of interest expense and income for the three and nine month periods ended October 29, 2022 and October 30, 2021:
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Taxes on Earnings |
9 Months Ended |
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Oct. 29, 2022 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings The Company’s effective tax rate for the three and nine month periods ended October 29, 2022 and October 30, 2021, was approximately 24%. The Company's effective tax rate is impacted by changes in tax law and accounting guidance, location of new stores, level of earnings, tax effects associated with stock-based compensation, and uncertain tax positions. As of October 29, 2022, January 29, 2022, and October 30, 2021, the reserves for unrecognized tax benefits were $70.7 million, $68.1 million, and $76.9 million, inclusive of $9.1 million, $7.6 million, and $9.8 million of related interest and penalties, respectively. The Company accounts for interest and penalties related to unrecognized tax benefits as a part of its provision for taxes on earnings. If recognized, $56.7 million would impact the Company’s effective tax rate. It is reasonably possible that certain state tax matters may be concluded or statutes of limitations may lapse during the next 12 months. Accordingly, the total amount of unrecognized tax benefits may decrease by up to $10.0 million. The difference between the total amount of unrecognized tax benefits and the amounts that would impact the effective tax rate relates to amounts attributable to deferred income tax assets and liabilities. These amounts are net of federal and state income taxes. The Company is open to audit by the Internal Revenue Service under the statute of limitations for fiscal years 2018 through 2021. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2017 through 2021. Certain federal and state tax returns are currently under audit by various tax authorities. The Company does not expect the results of these audits to have a material impact on the condensed consolidated financial statements.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Oct. 29, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of October 29, 2022 and October 30, 2021, the results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021. The Condensed Consolidated Balance Sheet as of January 29, 2022, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended January 29, 2022. The results of operations, comprehensive income, and stockholders’ equity for the three and nine month periods ended October 29, 2022 and October 30, 2021, and cash flows for the nine month periods ended October 29, 2022 and October 30, 2021 presented herein are not necessarily indicative of the results to be expected for the full fiscal year.
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Use of accounting estimates | Use of accounting estimates. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, and legal claims. The uncertainties and potential impacts from inflation, the Russia-Ukraine conflict, and the ongoing COVID-19 pandemic increase the challenge of making these estimates; actual results could differ materially from the Company’s estimates. |
Cash and cash equivalents and Restricted cash, cash equivalents, and investments | Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less.Restricted cash, cash equivalents, and investments. Restricted cash, cash equivalents, and investments serve as collateral for certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations. |
Property and equipment | Property and equipment. As of October 29, 2022 and October 30, 2021, the Company had $30.2 million and $14.4 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and equipment, Accounts payable, and Accrued expenses and other in the accompanying Condensed Consolidated Balance Sheets. |
Recently issued accounting standards | Recently issued accounting standards. In September 2022, the FASB issued Accounting Standards Update (ASU) 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, to enhance transparency about an entity's use of supplier finance programs. The ASU requires enhanced and additional disclosures about the key terms of supplier finance programs including a description of where in the financial statements any related amounts are presented. The initial guidance in the ASU will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase the transparency of the effects of government assistance, including disclosure of the types of assistance an entity receives, an entity’s method of accounting for government assistance, and the effect of government assistance on an entity’s financial statements. The guidance in this ASU will be effective for the Company for its fiscal 2022 Form 10-K. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.
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Fair Value Measurements | Fair Value MeasurementsAccounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The inputs used to measure fair value include: Level 1, observable inputs such as quoted prices in active markets; Level 2, inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, unobservable inputs in which little or no market data exists. This fair value hierarchy requires the Company to develop its own assumptions, maximize the use of observable inputs, and minimize the use of unobservable inputs when measuring fair value. Corporate, U.S. government and agency, and mortgage-backed securities are classified within Level 1 or Level 2 because these securities are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. |
Earnings Per Share | Earnings Per ShareThe Company computes and reports both basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period, except in cases where the effect of the common stock equivalents would be anti-dilutive. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following sales mix table disaggregates revenue by merchandise category for the three and nine month periods ended October 29, 2022 and October 30, 2021:
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Schedule of cash and cash equivalents reconciliation | The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:
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Schedule of restricted cash reconciliation | The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:
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Supplemental cash flow disclosures related to leases | Supplemental cash flow disclosures related to operating lease assets obtained in exchange for operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) were as follows:
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Fair Value Measurements (Tables) |
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Oct. 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values of financial instruments | The fair value of the Company’s financial instruments are as follows:
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Schedule of fair value of assets and liabilities | The fair value measurement for funds with quoted market prices in active markets (Level 1) are as follows:
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Management Incentive Plan and Stock-Based Compensation (Tables) |
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Share-Based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense by award type | For the three and nine month periods ended October 29, 2022 and October 30, 2021, the Company recognized stock-based compensation expense as follows:
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Schedule of stock-based compensation recognized in Consolidated Statements of Operations | Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and nine month periods ended October 29, 2022 and October 30, 2021, is as follows:
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Schedule of restricted stock, restricted stock units, and performance share award activity | A summary of restricted stock, restricted stock units, and performance share award activity for the nine month period ended October 29, 2022, is presented below:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations | The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:
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Schedule of components of interest expense and income | The table below shows the components of interest expense and income for the three and nine month periods ended October 29, 2022 and October 30, 2021:
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Summary of Significant Accounting Policies (Disaggregation of Revenue) (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Total | 100.00% | 100.00% | 100.00% | 100.00% |
Ladies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 25.00% | 26.00% | 25.00% | 26.00% |
Home Accents and Bed and Bath | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 25.00% | 25.00% | 25.00% | 25.00% |
Men’s | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 15.00% | 15.00% | 15.00% | 14.00% |
Accessories, Lingerie, Fine Jewelry, and Cosmetics | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 13.00% | 13.00% | 13.00% | 14.00% |
Shoes | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 13.00% | 11.00% | 13.00% | 12.00% |
Children’s | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 9.00% | 10.00% | 9.00% | 9.00% |
Summary of Significant Accounting Policies (Cash, Cash Equivalents, Restricted Cash Reconciliation) (Details) - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
Jan. 30, 2021 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 3,906,490 | $ 4,922,365 | $ 5,259,595 | |
Restricted cash and cash equivalents included in: | ||||
Prepaid expenses and other | 11,446 | 11,403 | 10,790 | |
Other long-term assets | 48,797 | 48,614 | 49,156 | |
Total restricted cash and cash equivalents | 60,243 | 60,017 | 59,946 | |
Total cash, cash equivalents, and restricted cash and cash equivalents | $ 3,966,733 | $ 4,982,382 | $ 5,319,541 | $ 4,953,769 |
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 16, 2022 |
Aug. 31, 2022 |
May 31, 2022 |
Mar. 31, 2022 |
Nov. 30, 2021 |
Aug. 31, 2021 |
May 31, 2021 |
Mar. 31, 2021 |
Oct. 29, 2022 |
Jul. 30, 2022 |
Apr. 30, 2022 |
Oct. 30, 2021 |
Jul. 31, 2021 |
May 01, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
Jan. 29, 2022 |
|
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.310 | $ 0.310 | $ 0.310 | $ 0.285 | $ 0.285 | $ 0.285 | $ 0.285 | $ 0.310 | $ 0.310 | $ 0.310 | $ 0.285 | $ 0.285 | $ 0.285 | ||||
Stock repurchased program period | 2 years | ||||||||||||||||
Stock repurchase program, amount authorized | $ 1,900,000,000 | $ 1,500,000,000 | |||||||||||||||
Stock repurchased, amount | $ 650,000,000 | ||||||||||||||||
Stock repurchased during period, shares (in shares) | 8.2 | 3.5 | |||||||||||||||
Repurchase of common stock | $ 718,693,000 | $ 416,979,000 | |||||||||||||||
Subsequent Event | |||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.310 | ||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||
Property and equipment purchased but not yet paid | $ 30,200,000 | $ 14,400,000 |
Summary of Significant Accounting Policies (Leases) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Accounting Policies [Abstract] | ||||
Operating lease assets obtained in exchange for operating lease liabilities | $ 235,186 | $ 208,767 | $ 549,267 | $ 395,428 |
Fair Value Measurements (Balance Sheet Items) (Details) - Level 1 - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents (Level 1) | $ 3,906,490 | $ 4,922,365 | $ 5,259,595 |
Restricted cash and cash equivalents (Level 1) | $ 60,243 | $ 60,017 | $ 59,946 |
Fair Value Measurements (Underlying Asset Value) (Details) - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | $ 148,849 | $ 163,891 | $ 178,966 |
Management Incentive Plan and Stock-Based Compensation (Recognized Stock-Based Compensation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | $ 29,493 | $ 38,517 | $ 92,367 | $ 96,775 |
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | 22,177 | 18,841 | 63,337 | 53,487 |
Performance awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | 6,186 | 18,601 | 25,800 | 40,000 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | $ 1,130 | $ 1,075 | $ 3,230 | $ 3,288 |
Management Incentive Plan and Stock-Based Compensation (Total Stock-Based Compensation Recognized in the Consolidated Statements of Earnings) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total | $ 29,493 | $ 38,517 | $ 92,367 | $ 96,775 |
Cost of goods sold | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total | 16,547 | 18,594 | 50,768 | 48,354 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total | $ 12,946 | $ 19,923 | $ 41,599 | $ 48,421 |
Management Incentive Plan and Stock-Based Compensation (Unvested Restricted Stock, RSU, and Performance Shares Activity) (Details) - Restricted Stock, Restricted Stock Units, and Performance Shares shares in Thousands |
9 Months Ended |
---|---|
Oct. 29, 2022
$ / shares
shares
| |
Number of shares | |
Beginning balance (in shares) | shares | 4,378 |
Awarded (in shares) | shares | 1,504 |
Released (in shares) | shares | (1,266) |
Forfeited (in shares) | shares | (101) |
Ending balance (in shares) | shares | 4,515 |
Weighted-average grant date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 99.58 |
Awarded (in dollars per share) | $ / shares | 88.98 |
Released (in dollars per share) | $ / shares | 90.38 |
Forfeited (in dollars per share) | $ / shares | 101.39 |
Ending balance (in dollars per share) | $ / shares | $ 98.44 |
Earnings Per Share (Narrative) (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Weighted average shares excluded from calculation of diluted EPS (in shares) | 85,000 | 13,200 | 492,000 | 3,000 |
Earnings Per Share (Schedule of Basic and Diluted EPS Computations) (Details) - $ / shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Basic EPS, Shares (in shares) | 342,120 | 351,071 | 344,686 | 352,308 |
Basic EPS , Amount (in dollars per share) | $ 1.00 | $ 1.10 | $ 3.09 | $ 3.85 |
Effect of dilutive common stock equivalents, Shares (in shares) | 1,600 | 2,010 | 1,526 | 2,169 |
Effect of dilutive common stock equivalents, Amount (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.03) |
Diluted EPS, Shares (in shares) | 343,720 | 353,081 | 346,212 | 354,477 |
Diluted EPS, Amount (in dollars per share) | $ 1.00 | $ 1.09 | $ 3.08 | $ 3.82 |
Debt (Interest Expense, Net) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Debt Disclosure [Abstract] | ||||
Interest expense on long-term debt | $ 21,150 | $ 22,227 | $ 63,429 | $ 66,626 |
Other interest expense | 448 | 391 | 1,242 | 1,012 |
Capitalized interest | (663) | (3,682) | (4,489) | (10,511) |
Interest income | (23,737) | (192) | (34,621) | (627) |
Interest (income) expense, net | $ (2,802) | $ 18,744 | $ 25,561 | $ 56,500 |
Taxes on Earnings (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
Jan. 29, 2022 |
|
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (percent) | 24.00% | 24.00% | 24.00% | 24.00% | |
Unrecognized tax benefits | $ 70.7 | $ 76.9 | $ 70.7 | $ 76.9 | $ 68.1 |
Income tax penalties and interest accrued | 9.1 | $ 9.8 | 9.1 | $ 9.8 | $ 7.6 |
Impact of recognizing taxes and interest related to unrecognized tax benefits | 56.7 | 56.7 | |||
Unrecognized tax benefits reduction resulting from conclusion of certain state tax matters or lapse of applicable statute of limitations (up to) | $ 10.0 | $ 10.0 |
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