http://www.morningstar.com/earnings/36503505-ross-stores-inc-rost-q4-2011.aspx

Ross Stores Inc ROST
Q4 2011 Earnings Call Transcript

Transcript Call Date 03/15/2012

Operator: Good morning, and welcome to the Ross Stores Fourth Quarter and Fiscal Year 2011 Earnings Release Conference Call. The call will begin with prepared comments by management followed by a question-and-answer session.

Before we get started on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts and other matters that are based on the Company's current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today’s press release and the Company's fiscal 2010 Form 10-K, fiscal 2011 Form 10-Qs and fiscal 2011 and 2012 form 8-Ks on file with the SEC.

Now, I'd like to turn the call over to Michael Balmuth, Vice Chairman and Chief Executive Officer.

Michael Balmuth - VC and CEO: Good morning. Joining me on our call today are Norman Ferber, Chairman of the Board; Michael O'Sullivan, President and Chief Operating Officer; Gary Cribb, Executive Vice President, Stores and Loss Prevention; John Call, Group Senior Vice President and Chief Financial Officer; and Bobbi Chaville, Senior Director of Investor Relations.

We'll begin with a brief review of our fourth quarter and 2011 performance, followed by our outlook for 2012. Afterwards, we'll be happy to respond to any questions you may have.

We are pleased with our robust sales and earnings in the fourth quarter and fiscal year of 2011, especially considering they were achieved on top of strong multiyear gains. Our healthy revenue growth continues to be driven mainly by our ability to deliver compelling bargains on a wide assortment of exciting name brand fashions for the family and the home to today's increasingly value focused consumers.

In addition, we continued to operate our business on lower in-store inventories which benefited profit margin by driving faster turns and lower markdowns. It also enhanced sales by increasing a percentage of fresh merchandise in our stores.

Earnings per share for the 13-weeks ended January 28, 2012 were $0.85, up from $0.69 for the 13-weeks ended January 29, 2011. These results represent a 23% increase on top of 18% and 53% gains in the fourth quarter of 2010 and 2009, respectively. Net earnings for the 2011 fourth quarter grew 19% to $192 million.

For the 52-weeks ended January 28, 2012, earnings per share were $2.86, up 24% on top of 31%, and 52% gains in fiscal 2010 and 2009. Net earnings for fiscal 2011 increased 18% to $657.2 million.

Fourth quarter sales rose 12% to $2.398 billion, with comparable store sales up 7% on top of 4% and 10% gains in the fourth quarter of the prior two years. For the full year, total sales grew 9% to $8.608 billion, with same store sales up 5% on top of 5% and 6% increases in 2010 and 2009 respectively.

Juniors and shoes were the best-performing merchandise categories for the quarter. For the full year, strongest businesses were dresses, shoes and juniors. Geographic trends were broad-based with all regions posting solid same-store sales increases for both the quarter and the year. Florida was the top region for both periods.

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