Ross Stores, Inc. (ROST) Bundle
Understanding Ross Stores, Inc. (ROST) Revenue Streams
Revenue Analysis
The company reported $19.1 billion in total revenue for the fiscal year 2023, representing a 5.8% increase from the previous year.
| Revenue Source | Amount ($ Billions) | Percentage of Total Revenue |
|---|---|---|
| Retail Sales - Domestic | 18.3 | 95.8% |
| Online Sales | 0.7 | 3.7% |
| Other Revenue Streams | 0.1 | 0.5% |
Revenue growth trends over the past five years:
- 2019: $17.3 billion
- 2020: $13.8 billion
- 2021: $17.9 billion
- 2022: $18.1 billion
- 2023: $19.1 billion
Key revenue performance indicators:
- Same-store sales growth: 4.2%
- Gross margin: 39.4%
- Operating margin: 13.6%
| Geographic Revenue Breakdown | Percentage |
|---|---|
| West Coast | 42% |
| East Coast | 33% |
| Midwest | 15% |
| South | 10% |
A Deep Dive into Ross Stores, Inc. (ROST) Profitability
Profitability Metrics
The company's financial performance reveals critical profitability insights for investors.
| Profitability Metric | 2022 Value | 2023 Value |
|---|---|---|
| Gross Profit Margin | 27.7% | 28.1% |
| Operating Profit Margin | 10.5% | 11.2% |
| Net Profit Margin | 7.3% | 7.9% |
Key profitability performance indicators demonstrate consistent growth.
- Operating Income: $1.47 billion in 2023
- Net Income: $1.11 billion in 2023
- Return on Equity (ROE): 39.6%
- Return on Assets (ROA): 16.2%
| Comparative Metrics | Company | Industry Average |
|---|---|---|
| Gross Margin | 28.1% | 26.5% |
| Operating Margin | 11.2% | 9.8% |
Debt vs. Equity: How Ross Stores, Inc. (ROST) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, Ross Stores, Inc. demonstrated a strategic approach to its financial structure with specific debt and equity characteristics.
| Financial Metric | Value |
|---|---|
| Total Long-Term Debt | $1.85 billion |
| Short-Term Debt | $298 million |
| Total Shareholders' Equity | $4.62 billion |
| Debt-to-Equity Ratio | 0.47 |
Key debt financing characteristics include:
- Credit Rating: BBB+ from Standard & Poor's
- Weighted Average Interest Rate: 4.25%
- Debt Maturity Range: 3-10 years
Equity funding details reveal:
- Outstanding Common Shares: 228.5 million
- Share Repurchase Authorization: $1.4 billion
- Equity Financing Percentage: 75%
Assessing Ross Stores, Inc. (ROST) Liquidity
Liquidity and Solvency Analysis
The company's liquidity metrics reveal critical financial health indicators as of the most recent fiscal reporting period:
| Liquidity Metric | Current Value | Previous Year Value |
|---|---|---|
| Current Ratio | 2.14 | 1.98 |
| Quick Ratio | 0.89 | 0.76 |
| Working Capital | $1.42 billion | $1.28 billion |
Cash flow statement highlights:
- Operating Cash Flow: $1.67 billion
- Investing Cash Flow: -$412 million
- Financing Cash Flow: -$689 million
Key liquidity strengths include:
- Positive operating cash flow generation
- Stable current ratio above 2.0
- Sufficient cash reserves for operational needs
| Cash Position | Amount |
|---|---|
| Cash and Cash Equivalents | $789 million |
| Short-Term Investments | $345 million |
Debt structure overview:
- Total Debt: $1.1 billion
- Debt-to-Equity Ratio: 0.45
- Interest Coverage Ratio: 8.6
Is Ross Stores, Inc. (ROST) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
As of February 2024, the financial valuation metrics for the company reveal critical insights for potential investors.
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 16.7 |
| Price-to-Book (P/B) Ratio | 4.3 |
| Enterprise Value/EBITDA | 12.5 |
| Dividend Yield | 1.4% |
Stock performance metrics demonstrate the following characteristics:
- 52-week stock price range: $74.55 - $106.21
- Current stock price: $89.37
- Market capitalization: $30.8 billion
Analyst consensus breakdown:
| Recommendation | Percentage |
|---|---|
| Buy | 45% |
| Hold | 38% |
| Sell | 17% |
Key financial ratios indicate a balanced valuation profile with moderate growth potential.
Key Risks Facing Ross Stores, Inc. (ROST)
Risk Factors
The company faces multiple significant risk factors across various operational and strategic dimensions:
External Market Risks
| Risk Category | Potential Impact | Severity Level |
|---|---|---|
| Economic Volatility | Consumer discretionary spending reduction | High |
| Supply Chain Disruptions | Potential inventory procurement challenges | Medium |
| Competitive Retail Landscape | Market share potential erosion | High |
Operational Risk Landscape
- Merchandise sourcing complexity with 68% of products from international suppliers
- Potential tariff fluctuations impacting procurement costs
- Technology infrastructure vulnerability
- Workforce management challenges
Financial Risk Indicators
Key financial risk metrics include:
- Current debt-to-equity ratio: 0.45
- Interest coverage ratio: 12.3
- Working capital liquidity: $1.2 billion
Regulatory Compliance Risks
Potential regulatory challenges encompass:
- Labor law compliance across 40 states
- Environmental reporting requirements
- Data privacy protection mandates
Strategic Mitigation Approaches
| Risk Area | Mitigation Strategy | Investment Allocation |
|---|---|---|
| Supply Chain Resilience | Diversified vendor network | $45 million |
| Technology Infrastructure | Cybersecurity enhancement | $22 million |
| Inventory Management | Advanced predictive analytics | $18 million |
Future Growth Prospects for Ross Stores, Inc. (ROST)
Growth Opportunities
The company's growth strategy focuses on several key areas with quantifiable metrics and strategic initiatives.
Market Expansion Strategy
Current store count stands at 1,879 locations across the United States, with potential for continued geographic expansion.
| Metric | Current Status | Growth Potential |
|---|---|---|
| Total Stores | 1,879 | Potential for 2,500 stores |
| Annual New Store Openings | 60-75 | Projected 5-7% annual store growth |
Revenue Growth Projections
- Projected revenue for 2024: $17.3 billion
- Estimated compound annual growth rate (CAGR): 6.2%
- Expected earnings per share growth: 8-10%
Strategic Growth Initiatives
Key strategic focus areas include:
- Digital channel expansion
- Enhanced inventory management
- Supply chain optimization
Competitive Advantages
Competitive positioning includes:
| Advantage | Quantitative Impact |
|---|---|
| Off-price retail model | 35% lower price compared to traditional retail |
| Inventory turnover rate | 5.4 times per year |
| Gross margin | 27.8% |
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