Ross Stores, Inc. (ROST) has reported a 13.78 percent rise in profit for the quarter ended Jan. 28, 2017. The company has earned $300.57 million, or $0.77 a share in the quarter, compared with $264.16 million, or $0.66 a share for the same period last year.
Revenue during the quarter grew 7.98 percent to $3,510.16 million from $3,250.73 million in the previous year period. Gross margin for the quarter expanded 107 basis points over the previous year period to 27.65 percent. Total expenses were 86.42 percent of quarterly revenues, down from 87.29 percent for the same period last year. This has led to an improvement of 87 basis points in operating margin to 13.58 percent.
Operating income for the quarter was $476.79 million, compared with $413.26 million in the previous year period.
Barbara Rentler, chief executive officer, commented, "We are very pleased with our better-than-expected sales and earnings results for the fourth quarter and fiscal year, especially given our strong multi-year comparisons and the highly competitive and promotional holiday season. Our results continued to benefit from our ability to offer customers great values on a wide assortment of gifts and fashions for the family and the home."
For financial year 2017, Ross Stores, Inc. expects revenue to grow in the range of 1 percent to 2 percent. The company projects diluted earnings per share to be in the range of $3.02 to $3.15.
For the first-quarter 2017, Ross Stores, Inc. expects revenue to grow in the range of 1 percent to 2 percent. The company projects diluted earnings per share to be in the range of $0.76 to $0.79.
Operating cash flow improves
Ross Stores, Inc. has generated cash of $1,558.85 million from operating activities during the year, up 17.54 percent or $232.60 million, when compared with the last year.
The company has spent $292.76 million cash to meet investing activities during the year as against cash outgo of $362.51 million in the last year.
The company has spent $916.09 million cash to carry out financing activities during the year as against cash outgo of $898.75 million in the last year period.
Cash and cash equivalents stood at $1,111.60 million as on Jan. 28, 2017, up 45.96 percent or $350 million from $761.60 million on Jan. 30, 2016.
Working capital increases sharply
Ross Stores, Inc. has recorded an increase in the working capital over the last year. It stood at $1,060.54 million as at Jan. 28, 2017, up 37.85 percent or $291.19 million from $769.35 million on Jan. 30, 2016. Current ratio was at 1.61 as on Jan. 28, 2017, up from 1.48 on Jan. 30, 2016.
Cash conversion cycle (CCC) was almost stable at 10 days for the quarter, when compared with the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 27 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 18 days for the quarter, when compared with the previous year period.
Debt remains almost stable
Total debt of Ross Stores, Inc. remained almost stable for the quarter at $396.49 million, when compared with the last year period. Long-term debt of Ross Stores, Inc. remained almost stable for the quarter at $396.49 million, when compared with the last year period. Total debt was 7.47 percent of total assets as on Jan. 28, 2017, compared with 8.13 percent on Jan. 30, 2016. Debt to equity ratio was at 0.14 as on Jan. 28, 2017, down from 0.16 as on Jan. 30, 2016.
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