Ross 2011 Annual Report Download - page 26

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24
Stores. Total stores open at the end of fiscal 2011, 2010, and 2009 were 1,125, 1,055, and 1,005, respectively. The number of
stores at the end of fiscal 2011, 2010, and 2009 increased by 7%, 5%, and 5% 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.
2011 2010 2009
Stores at the beginning of the period 1,055 1,005 956
Stores opened in the period 80 56 56
Stores closed in the period (10) (6) (7)
Stores at the end of the period 1,125 1,055 1,005
Selling square footage at the end of the period (000) 26,100 24,800 23,700
Sales. Sales for fiscal 2011 increased $742.2 million, or 9.4%, compared to the prior year due to the opening of 70 net new
stores during 2011, and a 5% increase in sales from “comparable” stores (defined as stores that have been open for more than 14
complete months). Sales for fiscal 2010 increased $681.9 million, or 9.5%, compared to the prior year due to the opening of 50
net new stores during 2010, and a 5% increase in sales from comparable stores.
Our sales mix is shown below for fiscal 2011, 2010, and 2009:
2011 2010 2009
Ladies 29% 29% 30%
Home Accents and Bed and Bath 25% 25% 24%
Men’s 13% 13% 13%
Accessories, Lingerie, Fine Jewelry, and Fragrances 13% 12% 13%
Shoes 12% 12% 11%
Children’s 8% 9% 9%
Total 100% 100% 100%
We intend 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 2011, 2010, and 2009, we cannot be sure that they will result in a continuation of sales growth or in an
increase in net earnings.
Cost of goods sold. Cost of goods sold in fiscal 2011 increased $511.0 million compared to the prior year mainly due to
increased sales from the opening of 70 net new stores during the year, and a 5% increase in sales from comparable stores.
Cost of goods sold as a percentage of sales for fiscal 2011 decreased approximately 35 basis points from the prior year. This
improvement was mainly the result of a 50 basis point increase in merchandise gross margin, which included a 15 basis point
benefit from lower shortage. In addition, occupancy leveraged 20 basis points. These improvements were partially offset by
increases in freight costs of about 20 basis points, distribution expenses of about 10 basis points, and buying costs of about five
basis points.