Summary Of Significant Accounting Policies | 3 Months Ended |
3-May-14 |
Accounting Policies [Abstract] | ' |
Summary Of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies |
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Basis of presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared from the records of Ross Stores, Inc. and subsidiaries (the “Company”) without audit and, in the opinion of management, include all adjustments (consisting of only normal, recurring adjustments) necessary to present fairly the Company’s financial position as of May 3, 2014 and May 4, 2013, the results of operations and comprehensive income for the three month periods ended May 3, 2014 and May 4, 2013, and cash flows for the three month periods ended May 3, 2014 and May 4, 2013. The Condensed Consolidated Balance Sheet as of February 1, 2014, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. |
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Accounting policies followed by the Company are described in Note A to the audited consolidated financial statements for the fiscal year ended February 1, 2014. Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including notes thereto, contained in the Company’s Annual Report on Form 10-K for the year ended February 1, 2014. |
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The results of operations and comprehensive income for the three month periods ended May 3, 2014 and May 4, 2013 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. |
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Restricted cash, cash equivalents, and investments. The Company has restricted cash, cash equivalents, and investments that serve as collateral for certain insurance obligations of the Company. These restricted funds are invested in bank deposits, money market mutual funds, U.S. Government and agency securities, and corporate securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The following table summarizes total restricted cash, cash equivalents, and investments which were included in Prepaid expenses and other and Other long-term assets in the Condensed Consolidated Balance Sheet as of May 3, 2014, February 1, 2014, and May 4, 2013: |
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Restricted Assets ($000) | May 3, 2014 | | | February 1, 2014 | | | May 4, 2013 | |
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Prepaid expenses and other | $ | 22,751 | | | $ | 20,734 | | | $ | 23,499 | |
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Other long-term assets | 55,699 | | | 50,763 | | | 57,533 | |
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Total | $ | 78,450 | | | $ | 71,497 | | | $ | 81,032 | |
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The classification between current and long-term is based on the timing of expected payments of the insurance obligations. |
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Property and equipment. As of May 3, 2014 and May 4, 2013, the Company had $17.8 million and $16.5 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and Equipment, Accounts payable, and Accrued expenses and other, and Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. |
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In October 2013, the Company entered into a Sale-Purchase Agreement under which it has the right to purchase the office building where its New York buying office is located for $222 million. The building is subject to a 99 year ground lease through June 2111. The Sale-Purchase Agreement contemplates completion of the sale and purchase of the building on or before September 20, 2014, subject to satisfaction of various closing conditions. Under the Sale-Purchase Agreement, the Company provided a deposit of 10% of the purchase price. In the event the Company is unable or chooses not to complete the purchase of the building, the Company would forfeit the deposit but have no further liability to the seller or obligation to complete the purchase. In September 2013, the Company deposited $11.1 million and provided an $11.1 million standby letter of credit to meet the 10% deposit obligation. Subsequent to the initial deposit, the Company has made additional cash deposits in escrow totaling $8.9 million. In connection with these additional cash deposits the Company has reduced the standby letter of credit to $2.2 million. The Company plans to finance the purchase of the building in 2014. |
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Sales mix. The Company’s sales mix is shown below for the three month periods ended May 3, 2014 and May 4, 2013: |
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| Three Months Ended | | | | | | |
| May 3, 2014 | | | May 4, 2013 | | | | | | | |
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Ladies | 31 | % | | 31 | % | | | | | | |
Home Accents and Bed and Bath | 23 | % | | 22 | % | | | | | | |
Shoes | 13 | % | | 14 | % | | | | | | |
Accessories, Lingerie, Fine Jewelry, and Fragrances | 13 | % | | 13 | % | | | | | | |
Men's | 12 | % | | 12 | % | | | | | | |
Children's | 8 | % | | 8 | % | | | | | | |
Total | 100 | % | | 100 | % | | | | | | |
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Dividends. Dividends included in the Condensed Consolidated Statements of Cash Flows reflect dividends paid during the periods shown. Dividends per share reported on the Condensed Consolidated Statements of Earnings reflect dividends declared during the periods shown. |
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In February 2014, the Company's Board of Directors declared a quarterly cash dividend of $0.20 per common share, that was paid in March 2014. The Company’s Board of Directors declared cash dividends of $0.17 per common share in January, May, August, and November 2013, respectively. |
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In May 2014, the Company's Board of Directors declared a cash dividend of $0.20 per common share, payable on June 30, 2014. |
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Provision for litigation costs and other legal proceedings. Like many California retailers, the Company has been named in class action lawsuits alleging violation of wage and hour and other employment laws. Class action litigation remains pending as of May 3, 2014. |
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The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company include commercial, product and product safety, customer, intellectual property, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, or local laws. Actions against the Company are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. |
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In the opinion of management, the resolution of pending class action litigation and other currently pending legal and regulatory proceedings is not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. |