On Aug. 22, Ross Stores (NASDAQ:ROST) released second-quarter earnings for the period ended Aug. 4.
- Earnings at Ross rose 12.1% higher, to $50.9 million.
- Total sales increased 10.4% to $1.4 billion, with same-store sales edging up 2%.
- Margins were essentially flat in the quarter, as lower SG&A expenses were countered by higher freight, distribution, and store costs.
- The first half of the year was positive, but the company saw a slowdown in the second half. As a result, it lowered its full-year outlook to a range of $1.80-$1.90 per share, from earlier guidance of $1.85-$1.95 per share.
- Ross is a three-star stock (out of a possible five) in Motley Fool CAPS, as is competitor TJX Companies (NYSE:TJX); rival Stein Mart (NASDAQ:SMRT) earns just two stars.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Sales |
$1,444.6 |
$1,308.1 |
10.4% |
|
Net Profit |
$50.9 |
$45.4 |
12.1% |
|
EPS |
$0.37 |
$0.32 |
15.6% |
|
Diluted Shares |
138.3 |
142.7 |
(3.1%) |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
21.7% |
21.7% |
0.0 |
|
Operating Margin |
5.8% |
5.6% |
0.2 |
|
Net Margin |
3.5% |
3.5% |
0.0 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$164.1 |
$66.8 |
145.7% |
|
Accounts Rec. |
$42.1 |
$33.9 |
24.1% |
|
Inventory |
$1,070.4 |
$959.8 |
11.5% |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$930.8 |
$860.6 |
8.2% |
|
Long-Term Debt |
$150.0 |
$0.0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
YTD 2007 |
YTD 2006 |
Change | |
|---|---|---|---|
|
Cash from Ops |
$7.6 |
$169.1 |
(95.5%) |
|
Capital Expenditures |
$107.3 |
$58.8 |
82.5% |
|
Free Cash Flow |
($99.6) |
$110.3 |
N/A |
Free cash flow is a Fool's best friend.
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At the time of publication, Fool contributor Mike Cianciolo held no position in any company mentioned in this article. The Motley Fool has a disclosure policy that will never end up in the bargain bin.
