Ross 2008 Annual Report Download - page 25

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23
Stores. Total stores open at the end of 2008, 2007 and 2006 were 956, 890 and 797, respectively. The number of stores at the
end of fiscal 2008, 2007 and 2006 increased by 7%, 12% and 9% from the respective prior years. Our expansion strategy is to
open additional stores based on market penetration, local demographic characteristics, competition, expected store profitability,
and the ability to leverage overhead expenses. We continually evaluate opportunistic real estate acquisitions and opportunities for
potential new store locations. We also evaluate our current store locations and determine store closures based on similar criteria.
2008 2007 2006
Stores at the beginning of the period 890 797 734
Stores opened in the period 77 97 66
Stores closed in the period (11) (4) (3)
Stores at the end of the period 956 890 797
Selling square footage at the end of the period (000) 22,500 21,100 18,600
Sales. Sales for fiscal 2008 increased $510.9 million, or 8.6%, compared to the prior year due to the opening of 66 net new
stores during 2008, and a 2% increase in sales from “comparable” stores (defined as stores that have been open for more than
14 complete months). Sales for fiscal 2007 increased $405.0 million, or 7.3%, compared to the same period in the prior year
due to the opening of 93 net new stores during 2007, and a 1% increase in sales from comparable stores.
Our sales mix is shown below for fiscal 2008, 2007 and 2006:
2008 2007 2006
Ladies 32% 32% 33%
Home accents and bed and bath 23% 23% 22%
Men’s 14% 15% 15%
Accessories, lingerie, fine jewelry, and fragrances 12% 11% 11%
Shoes 10% 10% 10%
Children’s 9% 9% 9%
Total 100% 100% 100%
We expect to address the competitive climate for off-price apparel and home goods by pursuing and refining our existing strategies
and by continuing to strengthen our organization, to diversify our merchandise mix, and to more fully develop our organization and
systems to improve regional and local merchandise offerings. Although our strategies and store expansion program contributed to
sales gains in fiscal 2008, 2007 and 2006, we cannot be sure that they will result in a continuation of sales growth or an increase in
net earnings.
Cost of goods sold. Cost of goods sold in fiscal 2008 increased $338.4 million compared to the prior year mainly due to
increased sales from the opening of 66 net new stores during the year, and a 2% increase in sales from comparable stores.
Cost of goods sold as a percentage of sales for fiscal 2008 decreased approximately 90 basis points from the prior year. This
improvement was mainly the result of a 100 basis point increase in merchandise gross margin as a percent of sales. In addition,
distribution costs for the year improved by about 20 basis points. As a percent of sales, these favorable trends were partially
offset by a 10 basis point increase in occupancy expense and a 20 basis point increase in incentive costs.
Cost of goods sold in fiscal 2007 increased $300.7 million compared to the prior year mainly due to increased sales from the
opening of 93 net new stores during the year, and a 1% increase in sales from comparable stores.