Stock Analysis on Net
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

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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).

Sales and Cost of Goods Sold
Sales consistently represent 100% throughout the periods, serving as a baseline for other ratios. The cost of goods sold (COGS) as a percentage of sales remained relatively stable around the 71% to 72% range from 2017 through 2020, with a notable spike to 78.51% in 2021, before decreasing back to 72.47% in 2022. This spike indicates a temporary increase in product or procurement costs during 2021.
Gross Profit
Gross profit margins mirrored trends in COGS, remaining fairly stable between 28% and 29% from 2017 to 2020. The gross profit percentage sharply dropped to 21.49% in 2021, coinciding with the increased COGS, and rebounded to 27.53% in 2022. This suggests that the company faced margin pressure in 2021 but managed a recovery the following year.
Selling, General and Administrative Expenses
SG&A expenses as a percentage of sales varied moderately, ranging approximately from 14.46% to 14.79% between 2017 and 2020. There was a significant increase to 19.98% in 2021, closely following the gross profit decline, before moderating to 15.20% in 2022. The peak in 2021 reflects elevated operating costs or investments that year, which subsequently decreased.
Operating Earnings
Operating earnings as a percentage of sales showed a steady decline from 14.49% in 2018 to 13.38% in 2020, followed by a dramatic fall to 1.51% in 2021, corresponding to the earlier noted trends in gross profit and SG&A expenses. Operating earnings then rose substantially to 12.33% in 2022, indicating a partial restoration of profitability at the operating level.
Interest Expense and Net Interest Income
Total interest expense generally remained low, below 0.15% of sales through most years, although it increased sharply to 0.7% in 2021 and then declined to 0.4% in 2022. Interest income fluctuated without a clear trend, reaching a peak of 0.18% in 2019 and then tapering to zero by 2022. Net interest (income/expense) shifted from slightly negative values in earlier years to a more negative impact in 2021 (-0.67%) before recovering somewhat in 2022 (-0.39%). The year 2021 marks a period with a notably higher interest burden, likely related to financing changes or higher debt levels.
Earnings Before Taxes and Net Earnings
Earnings before taxes followed a pattern consistent with operating earnings, falling from around 14% in 2018 to less than 1% in 2021, before rebounding to nearly 12% in 2022. The provision for taxes decreased substantially in 2021, aligned with the reduced pre-tax earnings, and increased again by 2022. Net earnings as a percentage of sales peaked at 10.59% in 2019, declined slightly through 2020, then declined dramatically to 0.68% in 2021 before partially recovering to 9.11% in 2022. This indicates overall earnings strength with a significant but temporary setback in 2021.