ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from __________ to __________ | ||
Commission file number: 0-14678 |
Delaware | 94-1390387 | |
(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) | |
organization) | ||
5130 Hacienda Drive, Dublin, California | 94568-7579 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code | (925) 965-4400 | |
Former name, former address and former fiscal year, if | N/A | |
changed since last report. |
Three Months Ended | Nine Months Ended | ||||||||||||||
($000, except stores and per share data, unaudited) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | |||||||||||
Sales | $ | 3,328,894 | $ | 3,086,687 | $ | 10,066,926 | $ | 9,356,599 | |||||||
Costs and Expenses | |||||||||||||||
Cost of goods sold | 2,369,148 | 2,206,092 | 7,120,056 | 6,634,142 | |||||||||||
Selling, general and administrative | 517,297 | 490,171 | 1,490,392 | 1,396,606 | |||||||||||
Interest expense, net | 1,780 | 4,156 | 7,290 | 12,733 | |||||||||||
Total costs and expenses | 2,888,225 | 2,700,419 | 8,617,738 | 8,043,481 | |||||||||||
Earnings before taxes | 440,669 | 386,268 | 1,449,188 | 1,313,118 | |||||||||||
Provision for taxes on earnings | 166,220 | 141,722 | 537,182 | 496,032 | |||||||||||
Net earnings | $ | 274,449 | $ | 244,546 | $ | 912,006 | $ | 817,086 | |||||||
Earnings per share | |||||||||||||||
Basic | $ | 0.72 | $ | 0.63 | $ | 2.38 | $ | 2.08 | |||||||
Diluted | $ | 0.72 | $ | 0.62 | $ | 2.36 | $ | 2.06 | |||||||
Weighted average shares outstanding (000) | |||||||||||||||
Basic | 379,432 | 390,870 | 382,959 | 393,412 | |||||||||||
Diluted | 382,132 | 393,372 | 385,823 | 396,056 | |||||||||||
Dividends | |||||||||||||||
Cash dividends declared per share | $ | 0.1600 | $ | 0.1350 | $ | 0.4800 | $ | 0.4050 | |||||||
Stores open at end of period | 1,627 | 1,535 | 1,627 | 1,535 |
Three Months Ended | Nine Months Ended | ||||||||||||||
($000, unaudited) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | |||||||||||
Net earnings | $ | 274,449 | $ | 244,546 | $ | 912,006 | $ | 817,086 | |||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in unrealized loss on investments, net of tax | (19 | ) | (35 | ) | (51 | ) | (58 | ) | |||||||
Comprehensive income | $ | 274,430 | $ | 244,511 | $ | 911,955 | $ | 817,028 |
($000, unaudited) | October 28, 2017 | January 28, 2017 | October 29, 2016 | ||||||||
Assets | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 1,144,169 | $ | 1,111,599 | $ | 878,811 | |||||
Short-term investments | 518 | — | 803 | ||||||||
Accounts receivable | 103,071 | 75,154 | 91,355 | ||||||||
Merchandise inventory | 1,840,225 | 1,512,886 | 1,763,745 | ||||||||
Prepaid expenses and other | 147,962 | 113,410 | 140,662 | ||||||||
Total current assets | 3,235,945 | 2,813,049 | 2,875,376 | ||||||||
Property and Equipment | |||||||||||
Land and buildings | 1,112,212 | 1,101,334 | 1,094,932 | ||||||||
Fixtures and equipment | 2,538,349 | 2,421,645 | 2,358,189 | ||||||||
Leasehold improvements | 1,065,910 | 998,508 | 979,907 | ||||||||
Construction-in-progress | 92,264 | 69,767 | 69,808 | ||||||||
4,808,735 | 4,591,254 | 4,502,836 | |||||||||
Less accumulated depreciation and amortization | 2,460,549 | 2,263,206 | 2,192,166 | ||||||||
Property and equipment, net | 2,348,186 | 2,328,048 | 2,310,670 | ||||||||
Long-term investments | 715 | 1,288 | 1,316 | ||||||||
Other long-term assets | 182,132 | 166,966 | 162,525 | ||||||||
Total assets | $ | 5,766,978 | $ | 5,309,351 | $ | 5,349,887 | |||||
Liabilities and Stockholders’ Equity | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | 1,289,620 | $ | 1,021,735 | $ | 1,149,136 | |||||
Accrued expenses and other | 445,728 | 398,126 | 439,570 | ||||||||
Accrued payroll and benefits | 320,894 | 316,492 | 299,238 | ||||||||
Income taxes payable | — | 16,153 | — | ||||||||
Total current liabilities | 2,056,242 | 1,752,506 | 1,887,944 | ||||||||
Long-term debt | 396,848 | 396,493 | 396,376 | ||||||||
Other long-term liabilities | 325,587 | 290,950 | 293,997 | ||||||||
Deferred income taxes | 129,782 | 121,385 | 122,048 | ||||||||
Commitments and contingencies | |||||||||||
Stockholders’ Equity | |||||||||||
Common stock | 3,824 | 3,919 | 3,944 | ||||||||
Additional paid-in capital | 1,272,056 | 1,215,715 | 1,199,922 | ||||||||
Treasury stock | (318,279 | ) | (272,846 | ) | (272,388 | ) | |||||
Accumulated other comprehensive income | 40 | 91 | 124 | ||||||||
Retained earnings | 1,900,878 | 1,801,138 | 1,717,920 | ||||||||
Total stockholders’ equity | 2,858,519 | 2,748,017 | 2,649,522 | ||||||||
Total liabilities and stockholders’ equity | $ | 5,766,978 | $ | 5,309,351 | $ | 5,349,887 |
Nine Months Ended | |||||||
($000, unaudited) | October 28, 2017 | October 29, 2016 | |||||
Cash Flows From Operating Activities | |||||||
Net earnings | $ | 912,006 | $ | 817,086 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | 227,255 | 224,136 | |||||
Stock-based compensation | 64,937 | 56,489 | |||||
Deferred income taxes | 9,074 | (8,040 | ) | ||||
Change in assets and liabilities: | |||||||
Merchandise inventory | (327,339 | ) | (344,641 | ) | |||
Other current assets | (62,610 | ) | (43,045 | ) | |||
Accounts payable | 271,526 | 213,168 | |||||
Other current liabilities | 51,567 | 100,385 | |||||
Other long-term, net | 19,217 | 13,690 | |||||
Net cash provided by operating activities | 1,165,633 | 1,029,228 | |||||
Cash Flows From Investing Activities | |||||||
Additions to property and equipment | (266,863 | ) | (220,442 | ) | |||
Decrease in restricted cash and investments | 828 | 3,496 | |||||
Proceeds from investments | 38 | 914 | |||||
Net cash used in investing activities | (265,997 | ) | (216,032 | ) | |||
Cash Flows From Financing Activities | |||||||
Excess tax benefit from stock-based compensation | — | 24,558 | |||||
Issuance of common stock related to stock plans | 13,668 | 14,182 | |||||
Treasury stock purchased | (45,440 | ) | (42,870 | ) | |||
Repurchase of common stock | (648,835 | ) | (530,303 | ) | |||
Dividends paid | (186,459 | ) | (161,554 | ) | |||
Net cash used in financing activities | (867,066 | ) | (695,987 | ) | |||
Net increase in cash and cash equivalents | 32,570 | 117,209 | |||||
Cash and cash equivalents: | |||||||
Beginning of period | 1,111,599 | 761,602 | |||||
End of period | $ | 1,144,169 | $ | 878,811 | |||
Supplemental Cash Flow Disclosures | |||||||
Interest paid | $ | 13,271 | $ | 13,271 | |||
Income taxes paid | $ | 552,720 | $ | 482,801 |
Restricted Assets ($000) | October 28, 2017 | January 28, 2017 | October 29, 2016 | ||||||||
Prepaid expenses and other | $ | 13,464 | $ | 13,642 | $ | 14,990 | |||||
Other long-term assets | 53,854 | 54,567 | 53,145 | ||||||||
Total | $ | 67,318 | $ | 68,209 | $ | 68,135 |
($000) | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
Cash and cash equivalents (Level 1) | $ | 1,144,169 | $ | 1,111,599 | $ | 878,811 | ||||||
Investments (Level 2) | $ | 1,233 | $ | 1,288 | $ | 2,119 | ||||||
Restricted cash and cash equivalents (Level 1) | $ | 63,768 | $ | 64,581 | $ | 64,468 | ||||||
Restricted investments | ||||||||||||
Level 1 | $ | — | $ | — | $ | 3,667 | ||||||
Level 2 | $ | 3,550 | $ | 3,628 | $ | — |
($000) | October 28, 2017 | January 28, 2017 | October 29, 2016 | ||||||||
Level 1 | $ | 99,387 | $ | 84,933 | $ | 81,001 | |||||
Level 2 | 16,787 | 15,490 | 15,841 | ||||||||
Total | $ | 116,174 | $ | 100,423 | $ | 96,842 |
Three Months Ended | Nine Months Ended | |||||||||||||||
($000) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Restricted stock | $ | 11,207 | $ | 10,108 | $ | 32,927 | $ | 28,657 | ||||||||
Performance awards | 10,215 | 9,423 | 29,668 | 25,661 | ||||||||||||
Employee stock purchase plan | 796 | 753 | 2,342 | 2,171 | ||||||||||||
Total | $ | 22,218 | $ | 20,284 | $ | 64,937 | $ | 56,489 |
Three Months Ended | Nine Months Ended | |||||||||||||||
Statements of Earnings Classification ($000) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Cost of goods sold | $ | 10,377 | $ | 9,569 | $ | 30,488 | $ | 25,677 | ||||||||
Selling, general and administrative | 11,841 | 10,715 | 34,449 | 30,812 | ||||||||||||
Total | $ | 22,218 | $ | 20,284 | $ | 64,937 | $ | 56,489 |
(000, except per share data) | Number of shares | Weighted average grant date fair value | ||||
Unvested at January 28, 2017 | 5,563 | $ | 43.19 | |||
Awarded | 1,266 | 64.83 | ||||
Released | (1,583 | ) | 37.97 | |||
Forfeited | (37 | ) | 49.03 | |||
Unvested at October 28, 2017 | 5,209 | $ | 50.77 |
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 28, 2017 | ||||||||||||||||||||||||
Shares | 379,432 | 2,700 | 382,132 | 382,959 | 2,864 | 385,823 | ||||||||||||||||||
Amount | $ | 0.72 | $ | — | $ | 0.72 | $ | 2.38 | $ | (0.02 | ) | $ | 2.36 | |||||||||||
October 29, 2016 | ||||||||||||||||||||||||
Shares | 390,870 | 2,502 | 393,372 | 393,412 | 2,644 | 396,056 | ||||||||||||||||||
Amount | $ | 0.63 | $ | (0.01 | ) | $ | 0.62 | $ | 2.08 | $ | (0.02 | ) | $ | 2.06 |
($000) | October 28, 2017 | January 28, 2017 | October 29, 2016 | |||||||||
6.38% Series A Senior Notes due 2018 | $ | 84,964 | $ | 84,939 | $ | 84,931 | ||||||
6.53% Series B Senior Notes due 2021 | 64,917 | 64,902 | 64,897 | |||||||||
3.375% Senior Notes due 2024 | 246,967 | 246,652 | 246,548 | |||||||||
Total | $ | 396,848 | $ | 396,493 | $ | 396,376 |
Three Months Ended | Nine Months Ended | |||||||||||||||
($000) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Interest expense on long-term debt | $ | 4,645 | $ | 4,643 | $ | 13,933 | $ | 13,929 | ||||||||
Other interest expense | 233 | 235 | 735 | 788 | ||||||||||||
Capitalized interest | (205 | ) | (7 | ) | (387 | ) | (16 | ) | ||||||||
Interest income | (2,893 | ) | (715 | ) | (6,991 | ) | (1,968 | ) | ||||||||
Interest expense, net | $ | 1,780 | $ | 4,156 | $ | 7,290 | $ | 12,733 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | |||||||||||||
Sales | ||||||||||||||||
Sales (millions) | $ | 3,329 | $ | 3,087 | $ | 10,067 | $ | 9,357 | ||||||||
Sales growth | 7.8 | % | 10.9 | % | 7.6 | % | 7.7 | % | ||||||||
Comparable store sales growth | 4 | % | 7 | % | 4 | % | 4 | % | ||||||||
Costs and expenses (as a percent of sales) | ||||||||||||||||
Cost of goods sold | 71.2 | % | 71.5 | % | 70.7 | % | 70.9 | % | ||||||||
Selling, general and administrative | 15.5 | % | 15.9 | % | 14.8 | % | 14.9 | % | ||||||||
Interest expense, net | 0.1 | % | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||
Earnings before taxes (as a percent of sales) | 13.2 | % | 12.5 | % | 14.4 | % | 14.0 | % | ||||||||
Net earnings (as a percent of sales) | 8.2 | % | 7.9 | % | 9.1 | % | 8.7 | % |
Three Months Ended | Nine Months Ended | |||||||||||
Store Count | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||
Beginning of the period | 1,589 | 1,501 | 1,533 | 1,446 | ||||||||
Opened in the period | 40 | 34 | 96 | 93 | ||||||||
Closed in the period | (2 | ) | — | (2 | ) | (4 | ) | |||||
End of the period | 1,627 | 1,535 | 1,627 | 1,535 |
Three Months Ended | Nine Months Ended | ||||||||||
October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||
Ladies | 28 | % | 28 | % | 28 | % | 29 | % | |||
Home Accents and Bed and Bath | 25 | % | 24 | % | 25 | % | 24 | % | |||
Shoes | 13 | % | 14 | % | 14 | % | 14 | % | |||
Men's | 13 | % | 13 | % | 13 | % | 13 | % | |||
Accessories, Lingerie, Fine Jewelry, and Fragrances | 13 | % | 13 | % | 12 | % | 12 | % | |||
Children's | 8 | % | 8 | % | 8 | % | 8 | % | |||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ended | Nine Months Ended | |||||||||||||||
($000) | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | ||||||||||||
Interest expense on long-term debt | $ | 4,645 | $ | 4,643 | $ | 13,933 | $ | 13,929 | ||||||||
Other interest expense | 233 | 235 | 735 | 788 | ||||||||||||
Capitalized interest | (205 | ) | (7 | ) | (387 | ) | (16 | ) | ||||||||
Interest income | (2,893 | ) | (715 | ) | (6,991 | ) | (1,968 | ) | ||||||||
Interest expense, net | $ | 1,780 | $ | 4,156 | $ | 7,290 | $ | 12,733 |
Nine Months Ended | |||||||
($000) | October 28, 2017 | October 29, 2016 | |||||
Cash provided by operating activities | $ | 1,165,633 | $ | 1,029,228 | |||
Cash used in investing activities | (265,997 | ) | (216,032 | ) | |||
Cash used in financing activities | (867,066 | ) | (695,987 | ) | |||
Net increase in cash and cash equivalents | $ | 32,570 | $ | 117,209 |
($000) | Less than one year | 1 - 3 years | 3 - 5 years | After 5 years | Total¹ | ||||||||||||||
Senior notes | $ | — | $ | 85,000 | $ | 65,000 | $ | 250,000 | $ | 400,000 | |||||||||
Interest payment obligations | 18,105 | 28,075 | 23,242 | 16,875 | 86,297 | ||||||||||||||
Operating leases (rent obligations) | 505,646 | 948,155 | 637,764 | 571,987 | 2,663,552 | ||||||||||||||
New York buying office ground lease² | 6,417 | 12,835 | 13,049 | 941,124 | 973,425 | ||||||||||||||
Purchase obligations | 2,486,181 | 26,428 | 4,107 | — | 2,516,716 | ||||||||||||||
Total contractual obligations | $ | 3,016,349 | $ | 1,100,493 | $ | 743,162 | $ | 1,779,986 | $ | 6,639,990 |
• | Competitive pressures in the apparel and home-related merchandise retailing industry, which are high. |
• | Unexpected changes in the level of consumer spending on or preferences for apparel and home-related merchandise, which could adversely affect us. |
• | Unseasonable weather that may affect shopping patterns and consumer demand for seasonal apparel and other merchandise. |
• | Impacts from the macro-economic environment, financial and credit markets, and geopolitical conditions that affect consumer confidence and consumer disposable income. |
• | Our need to effectively manage our inventories, markdowns, and inventory shortage in order to achieve our planned gross margins. |
• | Our dependence on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices. |
• | Information or data security breaches, including cyber-attacks on our transaction processing and computer information systems, which could result in theft or unauthorized disclosure of customer, credit card, employee, or other private and valuable information that we handle in the ordinary course of our business. |
• | Disruptions in our supply chain or in our information systems that could impact our ability to process sales and to deliver product to our stores in a timely and cost-effective manner. |
• | Our need to obtain acceptable new store sites with favorable consumer demographics to achieve our planned growth. |
• | Our need to expand in existing markets and enter new geographic markets in order to achieve growth. |
• | Consumer problems or legal issues involving the quality, safety, or authenticity of products we sell, which could harm our reputation, result in lost sales, and/or increase our costs. |
• | An adverse outcome in various legal, regulatory, or tax matters that could increase our costs. |
• | Damage to our corporate reputation or brands that could adversely affect our sales and operating results. |
• | Our need to continually attract, train, and retain associates with the retail talent necessary to execute our off-price retail strategies. |
• | Our need to effectively advertise and market our business. |
• | Risks associated with selling and importing merchandise produced in other countries. |
• | Changes in U.S. tax or tariff policy regarding apparel and home-related merchandise produced in other countries, which could adversely affect our business. |
• | Possible volatility in our revenues and earnings. |
• | A natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center that could harm our business. |
• | Our need to maintain sufficient liquidity to support our continuing operations, our new store and distribution center growth plans, and our stock repurchase program and quarterly dividends. |
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 | |||||||||
(7/30/2017 - 8/26/2017) | 982,914 | $56.64 | 981,918 | $1,264,300 | |||||
September | |||||||||
(8/27/2017 - 9/30/2017) | 1,497,139 | $60.61 | 1,468,048 | $1,175,300 | |||||
October | |||||||||
(10/01/2017 - 10/28/2017) | 1,161,148 | $64.26 | 1,154,021 | $1,101,200 | |||||
Total | 3,641,201 | $60.70 | 3,603,987 | $1,101,200 |
ROSS STORES, INC. | |||
(Registrant) | |||
Date: | December 6, 2017 | By: | /s/Michael J. Hartshorn |
Michael J. Hartshorn | |||
Group Senior Vice President, Chief Financial Officer, and Principal Accounting Officer |
Exhibit | |
Number | Exhibit |
3.1 | |
3.2 | |
15 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ross Stores, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | December 6, 2017 | /s/Barbara Rentler |
Barbara Rentler | ||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ross Stores, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | December 6, 2017 | /s/Michael J. Hartshorn |
Michael J. Hartshorn | ||
Group Senior Vice President, Chief Financial Officer, and Principal Accounting Officer |
(1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | December 6, 2017 | /s/Barbara Rentler |
Barbara Rentler | ||
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | December 6, 2017 | /s/Michael J. Hartshorn |
Michael J. Hartshorn | ||
Group Senior Vice President, Chief Financial Officer, and Principal Accounting Officer |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Oct. 28, 2017 |
Nov. 14, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 28, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | ROSS STORES INC | |
Entity Central Index Key | 0000745732 | |
Current Fiscal Year End Date | --02-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 382,145,997 |
Condensed Consolidated Statements of Earnings shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017
USD ($)
stores
$ / shares
shares
|
Oct. 29, 2016
USD ($)
stores
$ / shares
shares
|
Oct. 28, 2017
USD ($)
stores
$ / shares
shares
|
Oct. 29, 2016
USD ($)
stores
$ / shares
shares
|
|
Income Statement [Abstract] | ||||
Sales | $ 3,328,894 | $ 3,086,687 | $ 10,066,926 | $ 9,356,599 |
Costs and Expenses | ||||
Cost of goods sold | 2,369,148 | 2,206,092 | 7,120,056 | 6,634,142 |
Selling, general and administrative | 517,297 | 490,171 | 1,490,392 | 1,396,606 |
Interest expense, net | 1,780 | 4,156 | 7,290 | 12,733 |
Total costs and expenses | 2,888,225 | 2,700,419 | 8,617,738 | 8,043,481 |
Earnings before taxes | 440,669 | 386,268 | 1,449,188 | 1,313,118 |
Provision for taxes on earnings | 166,220 | 141,722 | 537,182 | 496,032 |
Net earnings | $ 274,449 | $ 244,546 | $ 912,006 | $ 817,086 |
Earnings per share | ||||
Basic (in dollars per share) | $ / shares | $ 0.72 | $ 0.63 | $ 2.38 | $ 2.08 |
Diluted (in dollars per share) | $ / shares | $ 0.72 | $ 0.62 | $ 2.36 | $ 2.06 |
Weighted average shares outstanding | ||||
Basic (in shares) | shares | 379,432 | 390,870 | 382,959 | 393,412 |
Diluted (in shares) | shares | 382,132 | 393,372 | 385,823 | 396,056 |
Dividends | ||||
Cash dividends declared per share (in dollars per share) | $ / shares | $ 0.1600 | $ 0.1350 | $ 0.4800 | $ 0.4050 |
Stores open at end of period (in number of stores) | stores | 1,627 | 1,535 | 1,627 | 1,535 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 274,449 | $ 244,546 | $ 912,006 | $ 817,086 |
Other comprehensive (loss) income: | ||||
Change in unrealized loss on investments, net of tax | (19) | (35) | (51) | (58) |
Comprehensive income | $ 274,430 | $ 244,511 | $ 911,955 | $ 817,028 |
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
---|---|---|---|
Current Assets | |||
Cash and cash equivalents | $ 1,144,169 | $ 1,111,599 | $ 878,811 |
Short-term investments | 518 | 0 | 803 |
Accounts receivable | 103,071 | 75,154 | 91,355 |
Merchandise inventory | 1,840,225 | 1,512,886 | 1,763,745 |
Prepaid expenses and other | 147,962 | 113,410 | 140,662 |
Total current assets | 3,235,945 | 2,813,049 | 2,875,376 |
Property and Equipment | |||
Land and buildings | 1,112,212 | 1,101,334 | 1,094,932 |
Fixtures and equipment | 2,538,349 | 2,421,645 | 2,358,189 |
Leasehold improvements | 1,065,910 | 998,508 | 979,907 |
Construction-in-progress | 92,264 | 69,767 | 69,808 |
Property and equipment, gross | 4,808,735 | 4,591,254 | 4,502,836 |
Less accumulated depreciation and amortization | 2,460,549 | 2,263,206 | 2,192,166 |
Property and equipment, net | 2,348,186 | 2,328,048 | 2,310,670 |
Long-term investments | 715 | 1,288 | 1,316 |
Other long-term assets | 182,132 | 166,966 | 162,525 |
Total assets | 5,766,978 | 5,309,351 | 5,349,887 |
Current Liabilities | |||
Accounts payable | 1,289,620 | 1,021,735 | 1,149,136 |
Accrued expenses and other | 445,728 | 398,126 | 439,570 |
Accrued payroll and benefits | 320,894 | 316,492 | 299,238 |
Income taxes payable | 0 | 16,153 | 0 |
Total current liabilities | 2,056,242 | 1,752,506 | 1,887,944 |
Long-term debt | 396,848 | 396,493 | 396,376 |
Other long-term liabilities | 325,587 | 290,950 | 293,997 |
Deferred income taxes | 129,782 | 121,385 | 122,048 |
Commitments and contingencies | |||
Stockholders’ Equity | |||
Common stock | 3,824 | 3,919 | 3,944 |
Additional paid-in capital | 1,272,056 | 1,215,715 | 1,199,922 |
Treasury stock | (318,279) | (272,846) | (272,388) |
Accumulated other comprehensive income | 40 | 91 | 124 |
Retained earnings | 1,900,878 | 1,801,138 | 1,717,920 |
Total stockholders’ equity | 2,858,519 | 2,748,017 | 2,649,522 |
Total liabilities and stockholders’ equity | $ 5,766,978 | $ 5,309,351 | $ 5,349,887 |
Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 28, 2017 and October 29, 2016, the results of operations and comprehensive income for the three and nine month periods ended October 28, 2017 and October 29, 2016, and cash flows for the nine month periods ended October 28, 2017 and October 29, 2016. The Condensed Consolidated Balance Sheet as of January 28, 2017, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. Accounting policies followed by the Company are described in Note A to the audited consolidated financial statements for the fiscal year ended January 28, 2017. 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 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 28, 2017. The results of operations and comprehensive income for the three and nine month periods ended October 28, 2017 and October 29, 2016, presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Restricted cash, cash equivalents, and investments. The Company has restricted cash, cash equivalents, and investments that serve as collateral for certain insurance obligations of the Company. 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 following table summarizes total restricted cash, cash equivalents, and investments which were included in Prepaid expenses and other and Other long-term assets in the Condensed Consolidated Balance Sheets as of October 28, 2017, January 28, 2017, and October 29, 2016:
The classification between current and long-term is based on the timing of expected payments of the insurance obligations. Property and equipment. As of October 28, 2017 and October 29, 2016, the Company had $6.4 million and $7.4 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. Cash Dividends. Dividends included in the Condensed Consolidated Statements of Cash Flows reflect cash dividends paid during the periods shown. Dividends per share reported on the Condensed Consolidated Statements of Earnings reflect cash dividends declared during the periods shown. The Company’s Board of Directors declared a cash dividend of $0.1600 per common share in February, May, and August 2017 and $0.1350 per common share in March, May, August, and November 2016, respectively. In November 2017, the Company’s Board of Directors declared a cash dividend of $0.1600 per common share, payable on December 29, 2017. Litigation, claims, and assessments. Like many retailers, the Company has been named in class action lawsuits, primarily in California, alleging violation of wage and hour/employment laws and consumer protection laws. Class action litigation remains pending as of October 28, 2017. 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, 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 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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2018. While the Company does not expect the adoption of this new guidance to be material to its consolidated financial statements, it does expect adoption to result in a change in the timing of recognizing revenue from breakage for stored value cards. Breakage will be estimated and recognized based upon the historical pattern of redemption, rather than when redemption is considered remote. Additionally, the Company expects to recognize allowances for estimated sales returns on a gross rather than net basis in the Consolidated Financial Statements. The Company expects to adopt the new standard under the modified retrospective method and will recognize a cumulative-effect adjustment in retained earnings as of the adoption date. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires balance sheet recognition for all leases with lease terms greater than one year including a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2019. The Company is currently evaluating the effect adoption of this new guidance will have on its consolidated financial statements. Due to the substantial number of leases that it has, the Company believes this ASU will increase assets and liabilities by the same material amount on its consolidated balance sheet. The Company’s current undiscounted minimum commitments under noncancelable operating leases is approximately $3.6 billion. The Company does not believe adoption of this ASU will have a significant impact to its consolidated statements of earnings, stockholders’ equity, and cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts on the statement of cash flows. The standard also requires companies who report cash and restricted cash separately on the balance sheet to reconcile those amounts to the statement of cash flows. ASU 2016-18 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2018. The Company does not believe adoption of this ASU will have a significant impact to its consolidated financial statements. Recently adopted accounting standards. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 provides for changes to accounting for stock compensation including 1) excess tax benefits and tax deficiencies related to share-based payment awards will be recognized as income tax benefit or expense in the reporting period in which they occur (previously such amounts were recognized in additional paid-in capital); 2) excess tax benefits will be classified as an operating activity in the statement of cash flows; and 3) the option to elect to estimate forfeitures or account for them when they occur. The impact of recording excess tax benefits in income taxes in the Condensed Consolidated Statement of Earnings may be material depending upon the Company’s future stock price on vest date in relation to the fair value of awards on grant date and the Company’s future grants of stock-based compensation. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and elected to apply this adoption prospectively, except for forfeitures which it adopted on a modified retrospective basis. Accordingly, prior periods have not been adjusted. As a result of adoption, for the nine month period ended October 28, 2017, the Company has recognized $16.1 million of excess tax benefits related to stock-based payments as a reduction to its provision for income taxes. These items were historically recorded in additional paid-in capital. The Company also presented cash flows related to excess tax benefits as an operating activity in the Condensed Consolidated Statement of Cash Flows and elected to account for forfeitures as incurred beginning on January 29, 2017. The impact of this accounting policy election for forfeitures was a cumulative-effect adjustment to decrease retained earnings by $1.1 million, net of tax, as of January 29, 2017. |
Fair Value Measurements |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The carrying value of cash and cash equivalents, short- and long-term investments, restricted cash and cash equivalents, restricted investments, accounts receivable, other long-term assets, accounts payable, and other long-term liabilities approximates their estimated fair value. 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 and 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. There were no transfers between Level 1 and Level 2 categories during the three and nine month periods ended October 28, 2017. 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 28, 2017, January 28, 2017, and October 29, 2016 (included in Other long-term assets and in Other long-term liabilities) primarily consist of participant-directed money market, stable value, stock, and bond funds. The fair value measurement for funds with quoted market prices in active markets (Level 1) and for funds without quoted market prices in active markets (Level 2) are as follows:
|
Stock-Based Compensation |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation. For the three and nine month periods ended October 28, 2017 and October 29, 2016, 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 28, 2017 and October 29, 2016, is as follows:
The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 28, 2017, were $7.9 million and $22.7 million, respectively. The tax benefits related to stock-based compensation expense for the three and nine month periods ended October 29, 2016, were $7.2 million and $19.7 million, respectively. Restricted stock awards. The Company grants shares of restricted stock to directors, officers, and key employees. The market value of shares of restricted stock at the date of grant is amortized to expense over the vesting period of generally three to five years. During the three and nine month periods ended October 28, 2017 and October 29, 2016, shares purchased by the Company for tax withholding totaled 37,214 and 683,961, and 55,831 and 737,891, 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 a profitability-based performance goal during the performance period, which is the Company’s fiscal year. If attained, the restricted stock then vests over a service period, generally two to three years from the date the performance award was granted. As of October 28, 2017, shares related to unvested restricted stock and performance share awards totaled 5.2 million shares. A summary of restricted stock and performance share award activity for the nine month period ended October 28, 2017, is presented below:
The unamortized compensation expense at October 28, 2017, was $123.0 million which is expected to be recognized over a weighted-average remaining period of 2.0 years. The unamortized compensation expense at October 29, 2016, was $112.8 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. 2017 Equity Incentive Plan. At the Company’s Annual Meeting on May 17, 2017, stockholders approved the Ross Stores, Inc. 2017 Equity Incentive Plan ("2017 Plan") which replaced the Company’s 2008 Equity Incentive Plan ("Predecessor Plan"). The 2017 Plan, which was authorized to issue a maximum of 12.0 million shares, was immediately effective upon approval and no further awards were granted under the Predecessor Plan, which was terminated. |
Earnings Per Share |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards, including unexercised stock options, and unvested shares of both performance and non-performance based awards of restricted stock. For the three and nine month periods ended October 28, 2017, approximately 14,600 and 446,500 weighted average shares were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for the period presented. For the three and nine month periods ended October 29, 2016, approximately 7,500 and 20,100 weighted average shares were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for the period presented. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations:
|
Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Senior notes. Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:
As of October 28, 2017, the Company had outstanding unsecured 3.375% Senior Notes due September 2024 (the “2024 Notes”) with an aggregate principal amount of $250 million. Interest on the 2024 Notes is payable semi-annually. As of October 28, 2017, the Company also had outstanding two other series of unsecured senior notes in the aggregate principal amount of $150 million, held by various institutional investors. The Series A notes totaling $85 million are due in December 2018, and bear interest at 6.38%. The Series B notes totaling $65 million are due in December 2021, and bear interest at 6.53%. Borrowings under these senior notes are subject to certain financial covenants, including interest coverage and other financial ratios. As of October 28, 2017, the Company was in compliance with these covenants. As of October 28, 2017, January 28, 2017, and October 29, 2016, total unamortized discount and debt issuance costs were $3.2 million, $3.5 million, and $3.6 million, respectively, and were classified as a reduction of Long-term debt. The 2024 Notes, Series A, and Series B senior notes are all subject to prepayment penalties for early payment of principal. The aggregate fair value of the three outstanding senior note issuances was approximately $415 million, $419 million, and $433 million as of October 28, 2017, January 28, 2017, and October 29, 2016, respectively. 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. The table below shows the components of interest expense and income for the three and nine month periods ended October 28, 2017 and October 29, 2016:
Revolving credit facility. The Company’s $600 million unsecured revolving credit facility expires in April 2021 and contains a $300 million sublimit for issuance of standby letters of credit (subject to increase in proportion to any increase in the size of the credit facility). The facility also contains an option allowing the Company to increase the size of its credit facility by up to an additional $200 million, with the agreement of the lenders. Interest on any borrowings under this facility is based on LIBOR plus an applicable margin (currently 100 basis points) and is payable quarterly and upon maturity. The revolving credit facility may be extended, at the Company’s option, for an additional one year period, subject to customary conditions. As of October 28, 2017, the Company had no borrowings or standby letters of credit outstanding under this facility and the $600 million credit facility remains in place and available. The revolving credit facility is subject to a financial leverage ratio covenant. As of October 28, 2017, the Company was in compliance with this covenant. |
Taxes on Earnings |
9 Months Ended |
---|---|
Oct. 28, 2017 | |
Income Tax Disclosure [Abstract] | |
Taxes on Earnings | Taxes on Earnings For the nine month period ended October 28, 2017, the Company has recognized $16.1 million of excess tax benefits related to stock-based compensation as a reduction to the provision for taxes on earnings as a result of the adoption of ASU 2016-09. Please refer to Note A for more details regarding the adoption of ASU 2016-09. As of October 28, 2017, January 28, 2017, and October 29, 2016, the reserves for unrecognized tax benefits were $109.3 million, $98.6 million, and $105.5 million inclusive of $20.8 million, $17.5 million, and $21.5 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, $56.0 million would impact the Company’s effective tax rate. 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. It is reasonably possible that certain federal and state tax matters may be concluded or statutes of limitations may lapse during the next twelve months. Accordingly, the total amount of unrecognized tax benefits may decrease, reducing the provision for taxes on earnings by up to $7.8 million. The Company is open to audit by the Internal Revenue Service under the statute of limitations for fiscal years 2013 through 2016. The Company’s state income tax returns are generally open to audit under the various statutes of limitations for fiscal years 2012 through 2016. 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 consolidated financial statements. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
---|---|
Oct. 28, 2017 | |
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 28, 2017 and October 29, 2016, the results of operations and comprehensive income for the three and nine month periods ended October 28, 2017 and October 29, 2016, and cash flows for the nine month periods ended October 28, 2017 and October 29, 2016. The Condensed Consolidated Balance Sheet as of January 28, 2017, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. Accounting policies followed by the Company are described in Note A to the audited consolidated financial statements for the fiscal year ended January 28, 2017. 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 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 28, 2017. The results of operations and comprehensive income for the three and nine month periods ended October 28, 2017 and October 29, 2016, presented herein are not necessarily indicative of the results to be expected for the full fiscal year. |
Restricted cash, cash equivalents and investments | Restricted cash, cash equivalents, and investments. The Company has restricted cash, cash equivalents, and investments that serve as collateral for certain insurance obligations of the Company. 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. |
Property and equipment | Property and equipment. As of October 28, 2017 and October 29, 2016, the Company had $6.4 million and $7.4 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. |
Litigation, claims, and assessments | Litigation, claims, and assessments. Like many retailers, the Company has been named in class action lawsuits, primarily in California, alleging violation of wage and hour/employment laws and consumer protection laws. Class action litigation remains pending as of October 28, 2017. 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, 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 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 and adopted accounting standards | Recently issued accounting standards. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2018. While the Company does not expect the adoption of this new guidance to be material to its consolidated financial statements, it does expect adoption to result in a change in the timing of recognizing revenue from breakage for stored value cards. Breakage will be estimated and recognized based upon the historical pattern of redemption, rather than when redemption is considered remote. Additionally, the Company expects to recognize allowances for estimated sales returns on a gross rather than net basis in the Consolidated Financial Statements. The Company expects to adopt the new standard under the modified retrospective method and will recognize a cumulative-effect adjustment in retained earnings as of the adoption date. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires balance sheet recognition for all leases with lease terms greater than one year including a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2019. The Company is currently evaluating the effect adoption of this new guidance will have on its consolidated financial statements. Due to the substantial number of leases that it has, the Company believes this ASU will increase assets and liabilities by the same material amount on its consolidated balance sheet. The Company’s current undiscounted minimum commitments under noncancelable operating leases is approximately $3.6 billion. The Company does not believe adoption of this ASU will have a significant impact to its consolidated statements of earnings, stockholders’ equity, and cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts on the statement of cash flows. The standard also requires companies who report cash and restricted cash separately on the balance sheet to reconcile those amounts to the statement of cash flows. ASU 2016-18 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2018. The Company does not believe adoption of this ASU will have a significant impact to its consolidated financial statements. Recently adopted accounting standards. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 provides for changes to accounting for stock compensation including 1) excess tax benefits and tax deficiencies related to share-based payment awards will be recognized as income tax benefit or expense in the reporting period in which they occur (previously such amounts were recognized in additional paid-in capital); 2) excess tax benefits will be classified as an operating activity in the statement of cash flows; and 3) the option to elect to estimate forfeitures or account for them when they occur. The impact of recording excess tax benefits in income taxes in the Condensed Consolidated Statement of Earnings may be material depending upon the Company’s future stock price on vest date in relation to the fair value of awards on grant date and the Company’s future grants of stock-based compensation. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and elected to apply this adoption prospectively, except for forfeitures which it adopted on a modified retrospective basis. Accordingly, prior periods have not been adjusted. As a result of adoption, for the nine month period ended October 28, 2017, the Company has recognized $16.1 million of excess tax benefits related to stock-based payments as a reduction to its provision for income taxes. These items were historically recorded in additional paid-in capital. The Company also presented cash flows related to excess tax benefits as an operating activity in the Condensed Consolidated Statement of Cash Flows and elected to account for forfeitures as incurred beginning on January 29, 2017. The impact of this accounting policy election for forfeitures was a cumulative-effect adjustment to decrease retained earnings by $1.1 million, net of tax, as of January 29, 2017. |
Summary of Significant Accounting Policies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted cash, cash equivalents and investments | The following table summarizes total restricted cash, cash equivalents, and investments which were included in Prepaid expenses and other and Other long-term assets in the Condensed Consolidated Balance Sheets as of October 28, 2017, January 28, 2017, and October 29, 2016:
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values | The fair value of the Company’s financial instruments are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value, assets and liabilities measured on recurring basis | The fair value measurement for funds with quoted market prices in active markets (Level 1) and for funds without quoted market prices in active markets (Level 2) are as follows:
|
Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense by award type | For the three and nine month periods ended October 28, 2017 and October 29, 2016, the Company recognized stock-based compensation expense as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total stock-based compensation recognized in the condensed consolidated statements of earnings | Total stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Earnings for the three and nine month periods ended October 28, 2017 and October 29, 2016, is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested restricted stock activity | A summary of restricted stock and performance share award activity for the nine month period ended October 28, 2017, is presented below:
|
Earnings Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Unsecured senior debt, net of unamortized discounts and debt issuance costs, consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income and interest expense disclosure | The table below shows the components of interest expense and income for the three and nine month periods ended October 28, 2017 and October 29, 2016:
|
Summary of Significant Accounting Policies (Restricted Cash, Cash Equivalents and Investments) (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
---|---|---|---|
Accounting Policies [Abstract] | |||
Prepaid expenses and other | $ 13,464 | $ 13,642 | $ 14,990 |
Other long-term assets | 53,854 | 54,567 | 53,145 |
Total | $ 67,318 | $ 68,209 | $ 68,135 |
Fair Value Measurements - Balance Sheet Items (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
---|---|---|---|
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 1,144,169 | $ 1,111,599 | $ 878,811 |
Restricted cash and cash equivalents | 63,768 | 64,581 | 64,468 |
Restricted investments | 0 | 0 | 3,667 |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments | 1,233 | 1,288 | 2,119 |
Restricted investments | $ 3,550 | $ 3,628 | $ 0 |
Fair Value Measurements - Underlying Asset Value (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
---|---|---|---|
Investment [Line Items] | |||
Underlying assets in non-qualified deferred compensation program | $ 116,174 | $ 100,423 | $ 96,842 |
Level 1 | |||
Investment [Line Items] | |||
Underlying assets in non-qualified deferred compensation program | 99,387 | 84,933 | 81,001 |
Level 2 | |||
Investment [Line Items] | |||
Underlying assets in non-qualified deferred compensation program | $ 16,787 | $ 15,490 | $ 15,841 |
Stock-Based Compensation (Recognized Stock-Based Compensation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 22,218 | $ 20,284 | $ 64,937 | $ 56,489 |
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 11,207 | 10,108 | 32,927 | 28,657 |
Performance awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 10,215 | 9,423 | 29,668 | 25,661 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 796 | $ 753 | $ 2,342 | $ 2,171 |
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. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation | $ 22,218 | $ 20,284 | $ 64,937 | $ 56,489 |
Cost of goods sold | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation | 10,377 | 9,569 | 30,488 | 25,677 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation | $ 11,841 | $ 10,715 | $ 34,449 | $ 30,812 |
Stock-Based Compensation (Unvested Restricted Stock Activity) (Details) - Restricted stock shares in Thousands |
9 Months Ended |
---|---|
Oct. 28, 2017
$ / shares
shares
| |
Number of shares | |
Beginning Balance (in shares) | shares | 5,563 |
Awarded (in shares) | shares | 1,266 |
Released (in shares) | shares | (1,583) |
Forfeited (in shares) | shares | (37) |
Ending Balance (in shares) | shares | 5,209 |
Weighted average grant date fair value | |
Beginning Balance (in dollars per share) | $ / shares | $ 43.19 |
Awarded (in dollars per share) | $ / shares | 64.83 |
Released (in dollars per share) | $ / shares | 37.97 |
Forfeited (in dollars per share) | $ / shares | 49.03 |
Ending Balance (in dollars per share) | $ / shares | $ 50.77 |
Earnings Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Earnings Per Share [Abstract] | ||||
Weighted average shares excluded from calculation of diluted EPS (in shares) | 14,600 | 7,500 | 446,500 | 20,100 |
Earnings Per Share - Schedule of Basic and Diluted EPS Computations (Details) - $ / shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Earnings Per Share [Abstract] | ||||
Basic EPS (in shares) | 379,432 | 390,870 | 382,959 | 393,412 |
Basic EPS (in dollars per share) | $ 0.72 | $ 0.63 | $ 2.38 | $ 2.08 |
Effect of dilutive common stock equivalents, (in shares) | 2,700 | 2,502 | 2,864 | 2,644 |
Effect of dilutive common stock equivalents, (in dollars per share) | $ 0.00 | $ (0.01) | $ (0.02) | $ (0.02) |
Diluted EPS (in shares) | 382,132 | 393,372 | 385,823 | 396,056 |
Diluted EPS (in dollars per share) | $ 0.72 | $ 0.62 | $ 2.36 | $ 2.06 |
Debt - Unsecured Senior Debt, Net of Unamortized Discounts and Issuance Costs (Details) - USD ($) $ in Thousands |
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term debt | $ 396,848 | $ 396,493 | $ 396,376 |
6.38% Series A Senior Notes due 2018 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 84,964 | 84,939 | 84,931 |
6.53% Series B Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 64,917 | 64,902 | 64,897 |
3.375% Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 246,967 | $ 246,652 | $ 246,548 |
Senior Notes due 2024 | 3.375% Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Unsecured senior notes interest rate | 3.375% | 3.375% | 3.375% |
Series A Senior Notes due 2018 | 6.38% Series A Senior Notes due 2018 | |||
Debt Instrument [Line Items] | |||
Unsecured senior notes interest rate | 6.38% | 6.38% | 6.38% |
Series B Senior Notes due 2021 | 6.53% Series B Senior Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Unsecured senior notes interest rate | 6.53% | 6.53% | 6.53% |
Debt - Interest Expense, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2017 |
Oct. 29, 2016 |
Oct. 28, 2017 |
Oct. 29, 2016 |
|
Debt Disclosure [Abstract] | ||||
Interest expense on long-term debt | $ 4,645 | $ 4,643 | $ 13,933 | $ 13,929 |
Other interest expense | 233 | 235 | 735 | 788 |
Capitalized interest | (205) | (7) | (387) | (16) |
Interest income | (2,893) | (715) | (6,991) | (1,968) |
Interest expense, net | $ 1,780 | $ 4,156 | $ 7,290 | $ 12,733 |
Taxes on Earnings (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Oct. 28, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
|
Income Tax Contingency [Line Items] | |||
Excess tax benefits related to stock-based compensation | $ 16.1 | ||
Unrecognized tax benefits | 109.3 | $ 98.6 | $ 105.5 |
Income tax penalties and interest accrued | 20.8 | $ 17.5 | $ 21.5 |
Impact of recognizing taxes and interest related to unrecognized tax benefits | 56.0 | ||
Unrecognized tax benefits reduction resulting from lapse of applicable statute of limitations (up to) | $ 7.8 | ||
Maximum | Internal Revenue Service | |||
Income Tax Contingency [Line Items] | |||
Open tax year | 2016 | ||
Maximum | State | |||
Income Tax Contingency [Line Items] | |||
Open tax year | 2016 | ||
Minimum | Internal Revenue Service | |||
Income Tax Contingency [Line Items] | |||
Open tax year | 2013 | ||
Minimum | State | |||
Income Tax Contingency [Line Items] | |||
Open tax year | 2012 |
V+?_Q6@YP#](V :S>SB
M;$KUIVJHUJNN/2^ZRVR=JO&E@'L=!W,[/IS&;OI?S+:/3]_6A5IE;V,[LV1S
MD>"-!*Z*+#9^[0&E'C;(PO%C!R57&"?WH,4<]!2O;W-(.#1BO)GBS4V\MF0,
M+I)\DASG+L9:(9EPF8=<^40V5G1C>38HQSLQWK%L"DVRN4CLC4W$'"U)NI1D
M!G0BFUQTDW,WAKC)63?.%#HG9KC*.N,+V8L7O7CF)2^(%\]Z*51.#)=<=.>5
M4;*50K12\$FV8(;*.,0.0Y!
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M$3$/)\ _?EY8CH1S.7$ZO?J^[E<.P73^TPM,UT(O+
7^!ZC!EHV"O>DIT^PU)-CM!3_!:X@/#QDXC5J+6S\HGJT3LN%Q:N\
SQSQR2"!0@8([$"Y$D@A@5"4""T N&30#))LK.)K$UM;:(H)C E BD10$DG
ME&A&03A>R"4&*3% 64TH\8SR"47I0C()B$GFF#"88)(Y9K2M3Y 4A*0 !$T@
MZ?Q<<+""*2N0LIK_/B&&!5 %TD !$JF5=(9I:-(0^*AA5#10CDB@#2KQ[YH
MR0@5A][2 2.P+'<( ZAHBL)S%$F\U<(Q([B $0%0\11%YJAPY05+6<&ECH!:
M#Z>UWAN-CRH*O&2:E#^Z1"LFKK9]2.?$;[7M7:/5H47ML+V$_YMW_>T'%=>B
MELZ1*WV5VPOWPKEB.IK TS]WKEOJ,"G919EAHL>BZRO=1/&F[YG^T+BW_P!0
M2P,$% @ Y)J%2VYS[<<0 @ E 4 !D !X;"]W;W)KQ2I/,YL9G]LO"2;;55O.//I+MZ(GZ+ZM7LN
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MOK!.4^%ZG_CN[L$J;FT@TQXY7TEZ]W5DJ
M7G=>="@U?7'WLK'W:^?_%08#2 <@/4!S?P2(.D#T!H@_!,0=(!X!0B?%YN:>
M*KI:"'[UA/M[6VK>(GP7Z^SOS*%-MGVFTR/UZ65%BG017HRCSF;C;,C !O<6
MH?;>4Q"(8D,F*>8#NU2$8F]U.3.(6#B$"=D<5'[W1FL(,8=!!;!_$P"7DV
M2I2SP2Z;C3-*@YED)2!-,J$A13ZB<388#6E0$42CK";3:(H\2(KA;Y1E ()1
M$B2P@A14D (*1CR;=*J H&"D
VE;=] =WT<2$,%IU*-,QQH4*P[>,)XW3;/K&EY@8+2U\*^'Z#ZP[^J<(D"W
M1XMI0-8A"[K>NKD4\U#10+!&C.M[PO[KT'1@44;9Q]$00NW);9IWF3I@IJ6Z
M.:[I2*HO]A2"9<2LY8CA4':)DDR$:KXC06PE97A_Z.K":9=82,"$<"^$B! '
M4G#04'E\)J6LG@,(H<1Z#7L@3J-A)\NZ>1O2 L_Y].S6'8MAXHM_CJYY% #/R"\B4C=4+KCTW/-@>.7Y22R&W[#];T",
M"S]TO__VU[_\LMK$#?>B?W,_$>=2BEC"R__P^)WG>[$GY.^"RR02PW\&7X6;
M1!'TA5W(Y89A-0(D^5 ;,21*C*E !5\1HA)P0;L[YOL@CCYGK/:VHU^;S=E!H%K5I7L]-1\@ZZVVCK\+5"ZX$
M>)@O?0!@$ S! 9!&]@0^H=\Y0RW>UCQZ,U_U7#&-VZS/U/=XES%*L_[QYOSV
M8OZQ\?']PCQ(Q[ZVG3^F&'UB[\YO_WBO>C^M#YRWS4=_Q(?// !NSWUZ*.&K
M>!!!(G1NXDMX.@*AD[J:PB6L:0CJ1K)WWT""7=:M=U?3RYFP:\S.R< 0T6JX
M3SQ=: ,P!#U'P".0_PVJ;^B.Q[BWM:=Z+
M(A[J%+4:+*6=]W1K.EM\_!CEY?@N$OP[3\DML5#D$$PH'WYV-4A>9 \HE8CY
M^P&])VJD6G]FW)GNBB?35"?"W*$Y/"8"1G0,$P[T0(9@:Z;*D"OU#)P3:%Y<
M_(B+FO&/P%XFX.#!L@^U(L5Z-C#0T]'EQVF*],96-^FC$HQ&/XBFI:IN&]%RDX1RS4#%7MIN%ZW;FW$C 'HE_QQD?3:38*JAR^2D5K6,P>-\UZ
M1+3.2MD[<0^.?=9!W>'13(-7W6GVV_NB"^$3I7H@^I63?@>'3)"2X)@UKA.Y;!0+7?&U5N=KM/N#\CW+B9$:7EUU8-3[;G!
M%5N["@.A[,4B(KF"(VEMRG6%_BY#+)BAJPD%BJ>Q"!.[C>%_JO 2EK6ZYE'@
M8-22W87Q6-D#[L)&7&0(>'=R_>464 S?&'I^@H(%W]38A7H#_D1C
M*6U896"$F7K*D C 2IFWF*9FS+Q'EGF/P?PV?6:AI
+_ =I.X>7Y.T#* .GU58Q^/;FY:M8;O7^U_O/MZH1Y0_B"
MN_%IKW=]<=UNMJZZ_8OVH#L8M ?U7J]YV;YLM"^Z]?;);T_HGZ?E-V\B)/LL
M'MG7<,(W(V'N==\+Q&F:F*71K/_\,;>>_TUD[(UF!KG[VUBP$1"+/2"U6#AB
M,7QS&4Z OV9_RTH[]3Y*-O("H".TP[Q QE$R$4$L&2P X_!CZ />R[-G^>"Y
M29J;T:M8=$OZNS!G$6VSBDM* ]/KJ%:\ -2A_ISO)@BC"9_Z 5U*PX%APPM
M@3!#DV -(4.# ,@,+N;\@Y-9!=E7E'DWJM5?;\T=;+1@"=R(NRCAD3('NJDY
M,-?N>8VNP:M[6F\6K;/_(4 HYTJYWVZ^-V+V()?C+"+Q9^(!_H"<^ K?Y%B(
M..-2Q6 H>""'S-
=RW:CU[_L
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MWSQZPWA\UFL.%M$V0"*?3Z4XR_[X^!1]%@//'\)9(%AS[
:IL/6ATF84+\["M0^JH*@&>4UVWV%GP9ZD2>$GM/8G,ZZ,]\VK&"]65'_]:
M^^ %C;B-=LFYG$]!(*< \R*N[0B,#@US[@=0*RU*,S^LF4YSH2(UH"SLHBD,
MR9WI/C-R+X&)6I]G=Q;4IF4:'UO=8K@S$V=J&&561^WE(#GX#R?=!5DAW;.J
M)OO[EP^)/+WG?'IVNW#7%J;N%R0OF(S?0/M<^,#^O_WU+[^ ;OI^-@K#&$!5
M_ ,^L!_JJRC$&8SC>'KVX&?[[V_\'4$L#!!0 ( .2:A4N\T(K\S@D
M Q; 1
:=5
MS2MO^/:53J5M#M4^PU"0.7Y@!V^93U(/AB.?!+LZ)\!V]^.8E.?'_VS;GZKOEB JTI'
MW2^S:O[;7_(/9UL\^M96?VG]&9[;=[6WB^[99XO%Q5^>/__Z]>M/WUPS^ZEN
M/C]GA!3/?Z]U;XG\%WPO!ODCH P*^M.W-CP[2B.