Ross 2010 Annual Report Download - page 6

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4
The recent increases to both our stock repurchase and
dividend programs demonstrate our confi dence in the
Company’s ongoing ability to generate signifi cant amounts
of excess cash after self-funding the capital needs of our
business. We have repurchased stock as planned every
year since 1993 and raised our quarterly cash dividend
annually since 1994. This consistent record of returning
excess cash refl ects our unwavering commitment to
enhancing stockholder value and returns.
Improved Business Model Enhances
Long-Term Profi tability
We are extremely pleased with our exceptional sales and
earnings increases and record returns over the past few
years. Looking ahead, we believe that our steadfast focus
on diligently executing our off-price strategies will enable us
to continue delivering compelling bargains and solid results
in 2011 and beyond.
Off-price buying is and always will be our most important
business strategy. We remain committed to making
ongoing investments in our merchandise organization to
maximize our access to the best opportunities for product
in the marketplace.
The biggest driver of our improved profi tability has been
much higher merchandise gross margin resulting from
better buying, and the signifi cant reductions we have
made in average selling store inventories. Today, selling
store inventories are more than 30% lower than just three
years ago. Our record results have also benefi ted from the
implementation of a number of initiatives on the operating
side of our business. These include our shortage control
program which has resulted in record low levels of shrink,
along with the numerous productivity enhancements and
effi ciencies we have put in place throughout the Company
to drive down costs in our distribution centers, stores
organization, and back offi ce functions.
As a result of these changes, we believe that our current
levels of annual operating margin are sustainable going
forward. This gives us the confi dence to continue to target
– over the longer term – average annual earnings per share
growth of 10% to 15%. The formula for achieving this is a
combination of unit growth, annual increases in same store
sales, and ongoing reductions in diluted shares from our
stock repurchase programs.
In closing, we extend our sincere appreciation to all of our
customers, business partners, and stockholders for their
continued support. We especially want to acknowledge
and thank our almost 50,000 associates who remain the
primary drivers of our past, present, and future success.
Sincerely,
Norman A. Ferber
Chairman of the Board
Michael Balmuth
Vice Chairman and
Chief Executive Offi cer