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Stock Analysis on Net

Ross Stores Inc. (NASDAQ:ROST)

This company has been moved to the archive! The financial data has not been updated since December 7, 2022.

Common-Size Income Statement

Ross Stores Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of goods sold -72.47 -78.51 -71.93 -71.59 -71.05 -71.30
Gross profit 27.53% 21.49% 28.07% 28.41% 28.95% 28.70%
Selling, general and administrative -15.20 -19.98 -14.69 -14.79 -14.46 -14.69
Operating earnings 12.33% 1.51% 13.38% 13.62% 14.49% 14.01%
Interest expense on long-term debt -0.47 -0.71 -0.08 -0.12 -0.13 -0.14
Interest expense on short-term debt 0.00 -0.06 0.00 0.00 0.00 0.00
Other interest expense -0.01 -0.03 -0.01 -0.01 -0.01 -0.01
Capitalized interest 0.08 0.10 0.03 0.02 0.01 0.00
Interest expense -0.40% -0.70% -0.06% -0.11% -0.13% -0.15%
Interest income 0.00 0.04 0.17 0.18 0.08 0.02
Interest income (expense), net -0.39% -0.67% 0.11% 0.07% -0.05% -0.13%
Earnings before taxes 11.94% 0.85% 13.49% 13.69% 14.44% 13.88%
Provision for taxes on earnings -2.83 -0.17 -3.14 -3.09 -4.80 -5.20
Net earnings 9.11% 0.68% 10.36% 10.59% 9.64% 8.69%

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

The financial performance from 2017 through 2022 is characterized by high operational stability for the first four years, a severe contraction in 2021, and a strong recovery in 2022. Net earnings margins grew steadily from 8.69% in 2017 to a peak of 10.59% in 2019 before the significant volatility observed in the final two years of the period.

Gross Profitability and Cost Management
Gross profit margins remained remarkably consistent between 28.07% and 28.95% from 2017 to 2020. A sharp deviation occurred in January 2021, with gross profit falling to 21.49% as the cost of goods sold increased to 78.51% of sales. This trend reversed in January 2022, as gross profit returned to 27.53%, indicating a restoration of pricing power or a reduction in procurement costs.
Operational Efficiency
Selling, general, and administrative expenses were maintained at a steady rate of approximately 14.5% of sales from 2017 to 2020. In January 2021, these expenses spiked to 19.98%, contributing to a collapse in operating earnings, which fell from 13.38% in 2020 to 1.51% in 2021. By January 2022, operating earnings recovered to 12.33%, supported by a reduction in administrative costs back to 15.20% of sales.
Financial Obligations and Net Margins
Interest expenses as a percentage of sales remained negligible between 2017 and 2020, reaching a low of 0.06% in 2020. An increase to 0.70% was observed in 2021, coinciding with the overall decline in profitability. The net earnings margin, which had been climbing toward 10.36% by 2020, dropped precipitously to 0.68% in 2021 before rebounding to 9.11% in 2022. This recovery suggests that the factors impacting the 2021 fiscal year were transient rather than systemic.

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