Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Jan. 31, 2015 |
Accounting Policies [Abstract] | |
Business | Business. Ross Stores, Inc. and its subsidiaries (the “Company”) is an off-price retailer of first-quality, in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family. At the end of fiscal 2014, the Company operated 1,210 Ross Dress for Less® (“Ross”) locations in 33 states, the District of Columbia and Guam, and 152 dd’s DISCOUNTS® stores in 15 states. The Ross and dd's DISCOUNTS stores are supported by five distribution centers. The Company’s headquarters, one buying office, two operating distribution centers, two warehouses, and 25% of its stores are located in California. |
Segment Reporting | Segment reporting. The Company has one reportable segment. The Company’s operations include only activities related to off-price retailing in stores throughout the United States. |
Basis Of Presentation And Fiscal Year | Basis of presentation and fiscal year. The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. Intercompany transactions and accounts have been eliminated. The Company follows the National Retail Federation fiscal calendar and utilizes a 52-53 week fiscal year whereby the fiscal year ends on the Saturday nearest to January 31. The fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013 are referred to as fiscal 2014, fiscal 2013, and fiscal 2012, respectively. Fiscal 2014 and 2013 were each 52-week years. Fiscal 2012 was a 53-week year. |
Use Of Accounting Estimates | Use of accounting estimates. The preparation of consolidated financial statements in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant accounting estimates include valuation reserves for inventory shortage, packaway inventory costs, useful lives of fixed assets, insurance reserves, and reserves for uncertain tax positions. |
Purchase Obligations | Purchase obligations. As of January 31, 2015, the Company had purchase obligations of approximately $1,953 million. These purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects, store fixtures and supplies, and information technology service, transportation, and maintenance contracts. |
Cash and Cash Equivalents | Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less. |
Restricted Cash, Cash Equivalents, And Investments | 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 Consolidated Balance Sheets as of January 31, 2015 and February 1, 2014: |
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Restricted Assets ($000) | | 2014 | | | 2013 | | | | | | | | | |
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Prepaid expenses and other | | $ | 19,713 | | | $ | 20,734 | | | | | | | | | |
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Other long-term assets | | 56,107 | | | 50,763 | | | | | | | | | |
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Total | | $ | 75,820 | | | $ | 71,497 | | | | | | | | | |
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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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Estimated Fair Value Of Financial Instruments | Estimated fair value of financial instruments. The carrying value of cash and cash equivalents, short- and long-term investments, restricted cash and cash equivalents, restricted investments, accounts receivable, other long-term assets, accounts payable, and other long-term liabilities approximates their estimated fair value. See Note B and Note D for additional fair value information. |
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Cash and cash equivalents were $696.6 million and $423.2 million, at January 31, 2015 and February 1, 2014, respectively, and include bank deposits and money market funds for which the fair value was determined using quoted prices for identical assets in active markets, which are considered to be Level 1 inputs under the fair value measurements and disclosures guidance. |
Investments | Investments. The Company’s investments are comprised of various debt securities. At January 31, 2015 and February 1, 2014, these investments were classified as available-for-sale and are stated at fair value. Investments are classified as either short- or long-term based on their original maturities and the Company’s intent. Investments with an original maturity of less than one year are classified as short-term. See Note B for additional information. |
Merchandise Inventory | Merchandise inventory. Merchandise inventory is stated at the lower of cost (determined using a weighted average basis) or net realizable value. The Company purchases manufacturer overruns and canceled orders both during and at the end of a season which are referred to as "packaway" inventory. Packaway inventory is purchased with the intent that it will be stored in the Company's warehouses until a later date. The timing of the release of packaway inventory to the stores is principally driven by the product mix and seasonality of the merchandise, and its relation to the Company’s store merchandise assortment plans. As such, the aging of packaway varies by merchandise category and seasonality of purchase, but typically packaway remains in storage less than six months. Merchandise inventory includes acquisition, processing, and storage costs related to packaway inventory. The cost of the Company’s merchandise inventory is reduced by valuation reserves for shortage based on historical shortage experience from the Company’s physical merchandise inventory counts and cycle counts. |
Cost of Goods Sold | Cost of goods sold. In addition to product costs, the Company includes in cost of goods sold its buying, distribution and freight expenses as well as occupancy costs, and depreciation and amortization related to the Company’s retail stores, buying, and distribution facilities. Buying expenses include costs to procure merchandise inventories. Distribution expenses include the cost of operating the Company’s distribution centers and warehouse facilities. |
Prepaid Expenses And Other | Prepaid expenses and other. Prepaid expenses and other as of January 31, 2015 and February 1, 2014 consisted of the following: |
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$0 | | 2014 | | | 2013 | | | | | | | | | |
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Restricted cash and investments | | $ | 19,713 | | | $ | 20,734 | | | | | | | | | |
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Prepaid expenses | | 87,065 | | | 81,257 | | | | | | | | | |
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Total | | $ | 106,778 | | | $ | 101,991 | | | | | | | | | |
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Property And Equipment | Property and equipment. Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful life of the asset, typically ranging from three to 12 years for equipment and 20 to 40 years for land improvements and buildings. Depreciation and amortization expense on property and equipment was $233.0 million, $206.1 million, and $185.5 million for fiscal 2014, 2013, and 2012, respectively. The cost of leasehold improvements is amortized over the useful life of the asset or the applicable lease term, whichever is less. The Company capitalizes interest during the construction period. Interest capitalized was $10.8 million, $10.8 million, and $3.9 million in fiscal 2014, fiscal 2013, and fiscal 2012, respectively. As of January 31, 2015, February 1, 2014, and February 2, 2013 the Company had $58.6 million, $61.3 million, and $23.7 million, respectively, of property and equipment purchased but not yet paid. These purchases are included in Property and Equipment and in Accounts payable and Accrued expenses and other in the accompanying Consolidated Balance Sheets. |
In September 2014, the Company completed the purchase of its previously leased New York buying office for $222 million. |
Other Long-Term Assets | Other long-term assets. Other long-term assets as of January 31, 2015 and February 1, 2014 consisted of the following: |
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$0 | | 2014 | | | 2013 | | | | | | | | | |
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Deferred compensation (Note B) | | $ | 94,054 | | | $ | 88,269 | | | | | | | | | |
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Restricted cash and investments | | 56,107 | | | 50,763 | | | | | | | | | |
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Deposits | | 3,285 | | | 3,285 | | | | | | | | | |
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Goodwill | | 2,889 | | | 2,889 | | | | | | | | | |
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Other | | 7,147 | | | 5,423 | | | | | | | | | |
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Total | | $ | 163,482 | | | $ | 150,629 | | | | | | | | | |
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Property and other long-term assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets that are not subject to amortization, including goodwill, are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. Based on the Company’s evaluation during fiscal 2014, 2013, and 2012, no impairment charges were recorded. |
Store Closures | Store closures. The Company continually reviews the operating performance of individual stores. For stores that are closed, the Company records a liability for future minimum lease payments net of estimated sublease recoveries and related ancillary costs at the time the liability is incurred. In 2014, the Company closed nine stores. In 2013, the Company closed 11 stores. The lease loss liability was $2.7 million and $6.3 million, as of January 31, 2015 and February 1, 2014, respectively. Operating costs, including depreciation, of stores to be closed are expensed during the period they remain in use. |
Accounts Payable | Accounts payable. Accounts payable represents amounts owed to third parties at the end of the period. Accounts payable includes book cash overdrafts (checks issued under zero balance accounts not yet presented for payment) in excess of cash balances in such accounts of approximately $123.8 million and $75.7 million at January 31, 2015 and February 1, 2014, respectively. The Company includes the change in book cash overdrafts in operating cash flows. |
Insurance Obligations | Insurance obligations. The Company uses a combination of insurance and self-insurance for a number of risk management activities, including workers’ compensation, general liability, and employee-related health care benefits. The self-insurance and deductible liability is determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. Self-insurance and deductible reserves as of January 31, 2015 and February 1, 2014 consisted of the following: |
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$0 | | 2014 | | | 2013 | | | | | | | | | |
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Workers’ compensation | | $ | 87,388 | | | $ | 82,223 | | | | | | | | | |
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General liability | | 37,253 | | | 34,524 | | | | | | | | | |
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Medical plans | | 3,159 | | | 3,537 | | | | | | | | | |
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Total | | $ | 127,800 | | | $ | 120,284 | | | | | | | | | |
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Other Long-Term Liabilities | Other long-term liabilities. Other long-term liabilities as of January 31, 2015 and February 1, 2014 consisted of the following: |
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$0 | | 2014 | | | 2013 | | | | | | | | | |
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Income taxes (Note F) | | $ | 101,696 | | | $ | 104,944 | | | | | | | | | |
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Deferred compensation (Note G) | | 94,054 | | | 88,269 | | | | | | | | | |
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Deferred rent | | 59,465 | | | 64,671 | | | | | | | | | |
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Tenant improvement allowances | | 19,562 | | | 19,744 | | | | | | | | | |
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Other | | 4,723 | | | 9,939 | | | | | | | | | |
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Total | | $ | 279,500 | | | $ | 287,567 | | | | | | | | | |
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Lease Accounting | Lease accounting. When a lease contains “rent holidays” or requires fixed escalations of the minimum lease payments, the Company records rental expense on a straight-line basis over the term of the lease and the difference between the average rental amount charged to expense and the amount payable under the lease is recorded as deferred rent. The Company begins recording rent expense on the lease possession date. Tenant improvement allowances are included in Other long-term liabilities and are amortized over the lease term. Changes in tenant improvement allowances are included as a component of operating activities in the Consolidated Statements of Cash Flows. |
Revenue Recognition | Revenue recognition. The Company recognizes revenue at the point of sale and maintains an allowance for estimated future returns. Sales of stored value cards are deferred until they are redeemed for the purchase of Company merchandise. The Company’s stored value cards do not have expiration dates. Based upon historical redemption rates, a small percentage of stored value cards will never be redeemed, which represents breakage. The Company recognizes income from stored value card breakage as a reduction of operating expenses when redemption by a customer is considered to be remote. Income recognized from breakage was not significant in fiscal 2014, 2013, and 2012. |
Sales tax collected is not recognized as revenue and is included in Accrued expenses and other. |
Allowance For Sales Returns | Allowance for sales returns. An allowance for the gross margin loss on estimated sales returns is included in Accrued expenses and other in the Consolidated Balance Sheets. The allowance for sales returns consists of the following: |
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$0 | | Beginning Balance | | | Additions | | | Returns | | | Ending Balance | |
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Year ended: | | | | | | | | |
January 31, 2015 | | $ | 7,431 | | | $ | 717,040 | | | $ | (715,877 | ) | | $ | 8,594 | |
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February 1, 2014 | | $ | 7,165 | | | $ | 699,835 | | | $ | (699,569 | ) | | $ | 7,431 | |
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February 2, 2013 | | $ | 6,426 | | | $ | 680,058 | | | $ | (679,319 | ) | | $ | 7,165 | |
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Store Pre-Opening | Store pre-opening. Store pre-opening costs are expensed in the period incurred. |
Advertising | Advertising. Advertising costs are expensed in the period incurred and are included in Selling, general and administrative expenses. Advertising costs for fiscal 2014, 2013, and 2012 were $72.1 million, $70.2 million, and $67.7 million, respectively. |
Share-Based Compensation | Stock-based compensation. The Company recognizes compensation expense based upon the grant date fair value of all stock-based awards, typically over the vesting period. See Note C for more information on the Company’s stock-based compensation plans. |
Taxes On Earnings | Taxes on earnings. The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's consolidated financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than changes in the tax law or tax rates. ASC 740 clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s consolidated financial statements. ASC 740 prescribes a recognition threshold of more-likely-than-not, and a measurement standard for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the consolidated financial statements. See Note F. |
Treasury Stock | Treasury stock. The Company records treasury stock at cost. Treasury stock includes shares purchased from employees for tax withholding purposes related to vesting of restricted stock grants. |
Earnings Per Share (EPS) | Earnings per share (“EPS”). The Company computes and reports both basic EPS and diluted EPS. Basic EPS is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted average number of common shares and dilutive common stock equivalents outstanding during the period. Diluted EPS reflects the total potential dilution that could occur from outstanding equity plan awards, including unexercised stock options and unvested shares of both performance and non-performance based awards of restricted stock and restricted stock units. |
In fiscal 2014, 2013, and 2012 there were 2,500, 2,900, and 53,900 weighted average shares, respectively, that were excluded from the calculation of diluted EPS because their effect would have been anti-dilutive for those years. |
The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations: |
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Shares in (000s) | | Basic EPS | | | Effect of dilutive | | | Diluted EPS | | | | | |
common stock equivalents | | | | |
2014 | | | | | | | | | | |
Shares | | 206,777 | | | 2,262 | | | 209,039 | | | | | |
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Amount | | $ | 4.47 | | | $ | (0.05 | ) | | $ | 4.42 | | | | | |
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2013 | | | | | | | | | | |
Shares | | 212,881 | | | 2,924 | | | 215,805 | | | | | |
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Amount | | $ | 3.93 | | | $ | (0.05 | ) | | $ | 3.88 | | | | | |
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2012 | | | | | | | | | | |
Shares | | 219,130 | | | 3,654 | | | 222,784 | | | | | |
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Amount | | $ | 3.59 | | | $ | (0.06 | ) | | $ | 3.53 | | | | | |
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Comprehensive Income | Comprehensive income. Comprehensive income includes net earnings and components of other comprehensive income (loss), net of tax, consisting of unrealized investment gains or losses |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Recently issued accounting standards. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a company should recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for the Company’s annual and interim reporting periods beginning in fiscal 2017. The Company is currently evaluating the effect that adoption of this new guidance will have on its consolidated financial statements. |