On this page of StockholderLetter.com we present the 4/8/2024 shareholder letter from ROSS STORES, INC. — ticker symbol ROST. Reading current and past ROST letters to shareholders can bring important insights into the investment thesis.

 •  4/8/2024 Letter Continued (Full PDF)
 •  4/3/2023 ROST Stockholder Letter
 •  4/7/2025 ROST Stockholder Letter
 •  4/6/2026 ROST Stockholder Letter
 •  More "Apparel Stores" Category Stockholder Letters
 •  ROST Benford's Law Stock Score = 73

ROST 4/8/2024 Shareholder/Stockholder Letter Transcript:

Bargains
in Stores
Every Day
Ross Stores, Inc. 2023 Annual Report
Ross Stores, Inc.
5130 Hacienda Drive
Dublin, CA 94568-7579
(925) 965-4400
www.rossstores.com
Sustainable Choice. Reduce, Reuse & Recycle.
To minimize our environmental impact, the Ross Stores, Inc.
2023 Annual Report was printed on paper containing fibers
from environmentally appropriate, socially beneficial, and
economically viable forest resources.
Ross Stores, Inc.
2023 Annual Report

Bargains
in Stores
Every Day!

We launched our off-price business over four decades ago
based on the premise that everyone always loves a bargain.
Since then, we have responded to the customer   s wants
and needs by consistently delivering outstanding values on
a wide array of quality name brand fashions in convenient
and easy-to-shop stores.
We accomplish this today through our two off-price apparel
and home fashion chains, Ross Dress for Less   (   Ross   ) and
dd   s DISCOUNTS   (   dd   s   ). The first Ross Dress for Less
locations opened in 1982. Today, Ross is the largest off-price
apparel and home fashion chain in the U.S. with 1,764 stores
in 43 states, the District of Columbia, and Guam. We launched
dd   s DISCOUNTS in 2004, and it now operates 345 locations
in 22 states.
Ross offers name brand apparel, accessories, footwear,
and home fashions for the entire family at savings of 20%
to 60% off department store and specialty store regular prices
every day. dd   s DISCOUNTS features more moderatelypriced assortments at savings of 20% to 70% off moderate
department and discount store prices every day. With the
continued careful execution of our off-price strategies, and
a consistent focus on offering quality branded bargains,
we remain confident in our prospects for increased market
share gains.
2023 Annual Report 1

To Our
Shareholders
We are pleased to report that our financial results for fiscal 2023 significantly
outperformed our expectations. Following a challenging year in 2022,
our business rebounded with above-plan growth in both sales and
earnings as customers responded positively to the improved assortments
of quality branded bargains throughout our stores and household
budgets benefited from easing inflationary pressures.
Fiscal 2023 Financial Results Total sales for the 53 weeks ended
February 3, 2024 grew to $20.4 billion, up from $18.7 billion for the
52 weeks ended January 28, 2023. Comparable store sales for the 52
weeks ended January 27, 2024 grew to a solid 5% versus a 4% decline
for the same period in fiscal 2022. Fiscal 2023 earnings per share grew to
$5.56 on net income of $1.9 billion, up from $4.38 per share on net income
of $1.5 billion in fiscal 2022. The 53rd week in fiscal 2023 added $308 million
to sales and approximately $0.20 to earnings per share.
Operating margin for the 53 weeks ended February 3, 2024 grew to 12.4%,
up 165 basis points versus fiscal 2022 as leverage from strong same store
sales gains and lower freight expenses were partially offset by higher
incentive costs and wages. Fiscal 2023 operating margin also included a
25 basis point benefit from the 53rd week.
2 Ross Stores, Inc.

dd   s DISCOUNTS 2023 Performance Sales at dd   s DISCOUNTS in
fiscal 2023 also improved versus 2022 but still trailed Ross as dd   s shoppers
have been disproportionately impacted by elevated costs of living in recent
years. While dd   s topline results were respectable in fiscal 2023, we are
disappointed with the chain   s performance in newer markets.
We have begun an in-depth analysis at dd   s to better understand and
address the different wants and needs of their diverse customer base,
particularly as we expand outside our existing markets. Until this work is
completed, we believe it is wise over the near term to moderate dd   s store
growth in newer markets and focus expansion primarily in existing regions.
Fiscal 2023 Store Growth In 2023, we opened 94 net new stores,
consisting of 71 Ross Dress for Less and 23 dd   s DISCOUNTS. We ended
the year with a total of 2,109 locations, consisting of 1,764 Ross and
345 dd   s stores in 43 states, the District of Columbia, and Guam.
Looking ahead, we continue to believe that Ross Dress for Less can
expand to about 2,900 locations and that dd   s DISCOUNTS can
eventually become a chain of approximately 700 stores. This represents
an overall forecasted potential of 3,600 stores, providing substantial
runway for expansion.
Consistent Cash Flows Fund Growth, Stock Repurchases, and
Dividends Operating cash flows helped fund new store expansion and
additional infrastructure improvements in 2023. We invested $763 million
in capital projects during the year, including $386 million for distribution,
information technology and other projects, and $377 million to open new
locations and refresh and enhance existing stores. We ended the year
with about $4.9 billion in cash and $2.5 billion in debt.
To maximize our ability to capture profitable market share, we continue to
plan for further investments over the next few years in our supply chain to
support long-term growth and in technology to further increase efficiencies
throughout our business.
94
Net New Stores in 2023
During fiscal 2023, we repurchased a total of 8.2 million shares of
common stock for an aggregate purchase price of $950 million, completing
the $1.9 billion two-year stock repurchase program as planned. In March
of 2024, we announced that our Board of Directors had authorized a
new two-year program to repurchase up to $2.1 billion of our common
stock through fiscal 2025. Also in March 2024, the Board increased the
Company   s quarterly cash dividend by 10% to $0.3675 per share.
The increases to our stock repurchase and dividend programs reflect
our ongoing commitment to enhancing stockholder value and returns
given the strength of our balance sheet and our ongoing ability to generate
significant amounts of cash after funding growth and other capital needs
of the business.
2023 Annual Report 3

4/8/2024 Letter Continued (Full PDF)

 

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