Ross 2015 Annual Report Download - page 34

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32
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
Ross Stores, Inc. operates two brands of off-price retail apparel and home fashion stores—Ross Dress for Less® (“Ross”)
and dd’s DISCOUNTS®. Ross is the largest off-price apparel and home fashion chain in the United States with 1,274
locations in 34 states, the District of Columbia and Guam as of January 30, 2016. Ross offers first-quality, in-season, name
brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off
department and specialty store regular prices every day. We also operate 172 dd’s DISCOUNTS stores in 15 states as of
January 30, 2016 that feature a more moderately-priced assortment of first-quality, in-season, name brand apparel,
accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and
discount store regular prices every day.
Our primary objective is to pursue and refine our existing off-price strategies to maintain and improve both profitability and
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 and believe our share gains over the past few years were driven mainly by continued
focus on value by consumers. Our sales and earnings gains in 2015 continued to benefit from efficient execution of our off-
price model throughout all areas of our business. Our merchandise and operational strategies are designed to take
advantage of the expanding market share of the off-price industry as well as the ongoing customer demand for name brand
fashions for the family and home at compelling discounts every day.
We refer to our fiscal years ended January 30, 2016, January 31, 2015, and February 1, 2014 as fiscal 2015, fiscal 2014,
and fiscal 2013, respectively.
All share and per share amounts have been adjusted for the two-for-one stock split effective June 11, 2015.
Results of Operations
The following table summarizes the financial results for fiscal 2015, 2014, and 2013:
2015
2014
2013
Sales
Sales (millions)
$ 11,940
$ 11,042
$ 10,230
Sales growth
8.1%
7.9%
5.2%
Comparable store sales growth
4%
3%
3%
Costs and expenses (as a percent of sales)
Cost of goods sold
71.8%
71.9%
72.0%
Selling, general and administrative
14.6%
14.6%
14.9%
Interest expense (income), net
0.1%
0.0%
0.0%
Earnings before taxes (as a percent of sales)
13.5%
13.5%
13.1%
Net earnings (as a percent of sales)
8.5%
8.4%
8.2%