Ross 2007 Annual Report Download - page 32

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30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
We are the second largest off-price apparel and home goods retailer in the United States. At the end of fiscal 2007, there were
838 Ross Dress for Less (“Ross”) locations in 27 states and Guam, and 52 dd’s DISCOUNTS stores in four states. Ross offers
first-quality, in-season, name-brand and designer apparel, accessories, footwear and home fashions at everyday savings of 20%
to 60% off department and specialty store regular prices. dd’s DISCOUNTS features a more moderately-priced assortment of
first-quality, in-season, name-brand apparel, accessories, footwear and home fashions at everyday savings of 20% to 70% off
moderate department and discount store regular prices.
Our primary objective is to pursue and refine our existing off-price strategies to drive gains in profitability and improved financial
returns over the long term. In establishing appropriate growth targets for our business, we closely monitor market share trends
for the off-price industry. Total aggregate sales for the five largest off-price retailers in the United States grew 6% during 2007
ontopofan8%increasein2006.Webelievethissolidgrowthreectstheongoingimportanceofvaluetoconsumers.Our
strategies are designed to take advantage of the expanding market share of our off-price industry as well as continued customer
demand for name-brand fashions for the family and home at compelling everyday discounts.
We refer to our fiscal years ended February 2, 2008, February 3, 2007, and January 28, 2006 as fiscal 2007, fiscal 2006, and fiscal
2005, respectively. Fiscal 2006 was 53 weeks. Fiscal 2007 and 2005 were 52 weeks.
Results of Operations
The following table summarizes the financial results for fiscal years ended February 2, 2008, February 3, 2007, and January 28,
2006.
2007 2006 2005
Sales
Sales (millions) $ 5,975 $ 5,570 $ 4,944
Sales growth 7.3% 12.7% 16.6%
Comparable store sales growth (52-week basis) 1% 4% 6%
Costs and expenses (as a percent of sales)
Cost of goods sold 77.3% 77.5% 77.9%
Selling, general and administrative 15.7% 15.5% 15.5%
Interest income, net (0.1%) (0.2%) (0.1%)
Earnings before taxes (as a percent of sales)
7.1% 7. 2% 6. 6%
Net earnings (as a percent of sales)
4.4% 4.3% 4.0%