Ross 2006 Annual Report Download - page 12

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• Double digit top line growth, with fiscal 2006
sales up 13%
• Same store sales gain of 4% on top of a 6%
gain in the prior year
• Operating margin expansion of 40 basis points
• EPS increase of 25% over the prior year
• A total of $200 million of common stock repur-
chased and $34 million in cash dividends paid
• Return on average stockholders’ equity of 28%
and return on average assets of 11%
Solid financial results in 2006 were driven by gains
in both sales and operating profitability.
Our long-term objective is to drive annual earnings per share
growth in the range of 15% to 20% over the next few years.
Our formula for getting there includes a combination of
store growth, comparable store sales gains, gradual improve-
ment in operating margin and a reduction in diluted shares
outstanding from our ongoing stock repurchase program.
We exceeded our earnings target for 2006.
Results benefited from solid double-digit top line growth and
progress in several areas of our business. These included
an increase in merchandise gross margin and reductions as
a percent of sales in both shortage and distribution center
costs. These improvements more than offset higher freight
costs and stock option-related expenses recognized in
connection with adoption of FAS 123(R).
Our financial position remains strong and flexible
as we move into 2007.
We continue to generate healthy cash flows that we believe
will give us the ability to self-fund store growth and ongoing
investments in our distribution center network in 2007.
In addition, we plan to continue to return excess cash to
stockholders through our stock repurchase and dividend
programs. We recently announced a 25% increase in our
quarterly cash dividend. Also, after repurchasing $200 million
of common stock in 2006, we expect to buy back a similar
amount in 2007 to complete the $400 million stock
repurchase program we announced in late 2005.
• Double digit top line growth, with fiscal 2006
sales up 13%
• Same store sales gain of 4% on top of a 6%
gain in the prior year
• Operating margin expansion of 40 basis points
• EPS increase of 25% over the prior year
• A total of $200 million of common stock repur-
chased and $34 million in cash dividends paid
• Return on average stockholders’ equity of 28%
and return on average assets of 11%
this is how we got here
results
12