Ross 2007 Annual Report Download - page 6

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4
Strong Cash Flows Fund Growth and Enhance Stockholder Returns
Operating cash flows in 2007 continued to provide the necessary resources to fund new store growth and
infrastructure improvements. We invested a total of about $236 million in capital including $110 million to open new
stores and about $60 million for our distribution network. We ended the year with $264 million in cash and short-term
investments and $150 million in long-term debt.
We also continued to return cash to stockholders through our stock repurchase and dividend programs. In 2007,
we repurchased 6.9 million shares for an aggregate purchase price of $200 million, completing our two-year
$400 million program.
In January 2008, our Board of Directors approved a new two-year $600 million stock repurchase program. This
represented a 50% increase over our prior program, reflecting our confidence in the long-term prospects of our
business. At the same time, our Board authorized a 27% increase in the quarterly cash dividend to $.095 per share, our
14th consecutive annual dividend increase.
Outlook for 2008 and Beyond
We believe that our value-focused business strategies will continue to enhance our ability to deliver respectable sales
and earnings growth in the coming year. Because we buy closer to need, we can operate with leaner inventory
levels which increases our ability to take advantage of great close-out opportunities. As an off-price retailer, the
upside for us in more difficult environments is our ability to take advantage of an abundance of great bargains in the
marketplace like we are doing today. As a result, we have been able to manage successfully through both healthy
and challenging economic climates, because bargains are always in style. For this reason, we usually experience less
volatility in our financial results than a comparable full-price retailer.
From 2008 through 2010, we will be gradually rolling out the next phase of micro-merchandising, consisting of
new systems enhancements and related process changes. We believe that over time, this initiative will lead to
improvements in sales and profitability by enhancing our ability to plan, buy and allocate product at a more local, or
even store, level.
Return on Average Stockholders’ Equity
2003 2004 2005 2006 2007
33%
22% 25% 28% 28%