Ross 2014 Annual Report Download - page 28

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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 1,210 locations in 33
states, the District of Columbia and Guam as of January 31, 2015. 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 152 dd’s DISCOUNTS stores in 15 states as of January 31, 2015 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 2014 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 31, 2015, February 1, 2014, and February 2, 2013 as fiscal 2014, fiscal 2013, and
fiscal 2012, respectively. Fiscal 2014 and 2013 were 52-week years. Fiscal 2012 was a 53-week year.
Results of Operations
The following table summarizes the financial results for fiscal 2014, 2013, and 2012:
2014 2013 20121
Sales
Sales (millions) $ 11,042 $ 10,230 $ 9,721
Sales growth 7.9% 5.2% 12.9%
Comparable store sales growth (52-week basis) 3% 3% 6%
Costs and expenses (as a percent of sales)
Cost of goods sold 71.9% 72.0% 72.1%
Selling, general and administrative 14.6% 14.9% 14.8%
Interest expense (income), net 0.0% 0.0% 0.1%
Earnings before taxes (as a percent of sales) 13.5% 13.1% 13.0%
Net earnings (as a percent of sales)
8.4% 8.2% 8.1%
¹ Fiscal 2012 was a 53-week year; all other fiscal years presented were 52 weeks.
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