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Summary of Significant Accounting Policies | 3 Months Ended
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May 03, 2025
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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, 2025 and May 4, 2024, and the results of operations, comprehensive income, stockholders’ equity, and cash flows for the three month periods ended May 3, 2025 and May 4, 2024. The Condensed Consolidated Balance Sheet as of February 1, 2025, presented herein, has been derived from the Company’s audited consolidated financial statements for the fiscal year then ended. Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) 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, 2025. The results of operations, comprehensive income, stockholders’ equity, and cash flows for the three month periods ended May 3, 2025 and May 4, 2024 pr esented herein are not necessarily indicative of the results to be expected for the full fiscal ye ar. The fiscal years ending January 31, 2026 and February 1, 2025 are referred to as fiscal 2025 and fiscal 2024, respectively, and are both 52-week years. The three month periods ended May 3, 2025 and May 4, 2024 are referred to as the first quarter of fiscal 2025 and fiscal 2024, respectively. Use of accounting estimates. The preparation of financial statements in conformity with 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 condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from the Company’s estimates. The Company’s significant accounting estimates include valuation reserves for inventory, packaway and other inventory carrying costs, useful lives of fixed assets, insurance reserves, reserves for uncertain tax positions, and legal claims. Segment reporting. The Company has one reportable segment. Refer to Note G: Segment Reporting for additional information. Cash and cash equivalents. Cash equivalents consist of highly liquid, fixed income instruments purchased with an original maturity of three months or less. The institutions where these instruments are held could potentially subject the Company to concentrations of credit risk. The Company manages its risk associated with these instruments by primarily holding its cash and cash equivalents across a highly diversified set of banks and other financial institutions. Restricted cash and cash equivalents. Restricted cash and cash equivalents serve as collateral for certain insurance obligations. These restricted funds are invested in bank deposits, money market mutual funds, and U.S. Government and agency securities and cannot be withdrawn from the Company’s account without the prior written consent of the secured parties. The classification between current and long-term is based on the timing of expected payments of the obligations. The Company uses standby letters of credit in addition to a funded trust to collateralize certain insurance obligations. The standby letters of credit are collateralized by restricted cash. As of May 3, 2025, February 1, 2025, and May 4, 2024, the Company had $1.0 million, $1.8 million, and $2.2 million, respectively, in standby letters of credit outstanding. As of May 3, 2025, February 1, 2025, and May 4, 2024, the Company had $64.6 million, $63.9 million, and $61.6 million, respectively, in a collateral trust. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets, that reconcile to the amounts shown on the Condensed Consolidated Statements of Cash Flows:
($000) | May 3, 2025 |  | February 1, 2025 |  | May 4, 2024
Cash and cash equivalents | $ | 3,783,413 |  |  | $ | 4,730,744 |  |  | $ | 4,654,316 |
Restricted cash and cash equivalents included in: |  |  |  |  |
Prepaid expenses and other | 17,050 |  |  | 17,087 |  |  | 14,666 |
Other long-term assets | 48,527 |  |  | 48,631 |  |  | 49,098 |
Total restricted cash and cash equivalents | 65,577 |  |  | 65,718 |  |  | 63,764 |
Total cash, cash equivalents, and restricted cash and cash equivalents | $ | 3,848,990 |  |  | $ | 4,796,462 |  |  | $ | 4,718,080 |
Property and equipment. As of May 3, 2025 and May 4, 2024, the Company had $29.2 million and $34.4 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 in the accompanying Condensed Consolidated Balance Sheets. For the three month periods ended May 3, 2025 and May 4, 2024, depreciation and amortization expense on property and equipment was $115.9 million and $109.2 million, respectively. Operating leases. Operating lease assets obtained in exchange for operating lease liabilities (includes new leases and remeasurements or modifications of existing leases) were as follows:
| Three Months Ended |  |
($000) | May 3, 2025 |  | May 4, 2024 |  |  |  |
Operating lease assets obtained in exchange for operating lease liabilities | $ | 202,703 |  |  | $ | 248,336 |  |  |  |  |
Supply chain finance program. The Company facilitates a voluntary supply chain finance program (“SCF program”) to provide certain suppliers with the opportunity to sell their receivables due from the Company to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. A third-party financial institution administers the SCF program. The Company’s responsibility is limited to making payments on the terms originally negotiated with each supplier, regardless of whether a supplier sells its receivable to a financial institution. The Company is not a party to the agreements between the participating financial institutions and the suppliers in connection with the SCF program, and does not receive financial incentives from the suppliers or the financial institutions. The Company does not provide guarantees under the SCF program, and the Company’s rights and obligations to its suppliers are not affected by the SCF program. The range of payment terms negotiated with a supplier is consistent, irrespective of whether a supplier participates in the SCF program. All outstanding payments owed under the SCF program are recorded within Accounts payable in the Condensed Consolidated Balance Sheets. The Company accounts for all payments made under the SCF program as a reduction to operating cash flows in Accounts payable within the Condensed Consolidated Statements of Cash Flows. The amounts owed to participating financial institutions under the SCF program and included in Accounts payable were $162.2 million, $159.2 million, and $161.5 million as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively. Cash dividends. On May 21, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.4050 per common share, payable on June 30, 2025. The Company’s Board of Directors declared a quarterly cash dividend of $0.4050 per common share in March 2025, and $0.3675 per common share in March, May, August, and November 2024. Stock repurchases. In March 2024, the Company’s Board of Directors approved a two-year stock repurchase program to repurchase up to $2.1 billion of the Company’s common stock through fiscal 2025. During the three month period ended May 3, 2025, the Company repurchased 2.0 million shares of common stock for $262.5 million (excluding excise tax) under this program. As of May 3, 2025, there was $787.5 million available for repurchase under this program. During the three month period ended May 4, 2024, the Company repurchased 1.9 million shares of common stock for $262.5 million (excluding excise tax) under this program. Stock repurchased for tax withholding is considered treasury stock which is available for reissuance. During the three month periods ended May 3, 2025 and May 4, 2024, shares purchased by the Company for tax withholding totaled 486,000 and 485,000, respectively. Litigation, claims, and assessments. Like many retailers, the Company has been named in class/representative action lawsuits, primarily in California, alleging violations by the Company of wage and hour laws. Class/representative action litigation remains pending as of May 3, 2025. The Company is also party to various other legal and regulatory proceedings arising in the normal course of business. Actions filed against the Company may include commercial, product and product safety, consumer, intellectual property, environmental, and labor and employment-related claims, including lawsuits in which private plaintiffs or governmental agencies allege that the Company violated federal, state, and/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. In the opinion of management, the resolution of currently pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Revenue recognition. The following sales mix table disaggregates revenue by merchandise category for the three month periods ended May 3, 2025 and May 4, 2024:
| Three Months Ended |  |  |
| May 3, 2025 |  | May 4, 2024 |  |  |  |  |
Home Accents and Bed and Bath | 26 | % |  | 26 | % |  |  |  |  |
Ladies | 23 | % |  | 23 | % |  |  |  |  |
Accessories, Lingerie, Fine Jewelry, and Cosmetics | 15 | % |  | 15 | % |  |  |  |  |
Men’s | 14 | % |  | 14 | % |  |  |  |  |
Shoes | 13 | % |  | 13 | % |  |  |  |  |
Children’s | 9 | % |  | 9 | % |  |  |  |  |
Total | 100 | % |  | 100 | % |  |  |  |  |
Interest income, net. The table below shows the components of interest income, net for the three month periods ended May 3, 2025 and May 4, 2024:
| Three Months Ended |  |
($000) | May 3, 2025 |  | May 4, 2024 |  |  |  |
Interest income | $ | (46,868) |  |  | $ | (63,218) |  |  |  |  |
Capitalized interest | (5,404) |  |  | (4,265) |  |  |  |  |
Other interest expense | 400 |  |  | 358 |  |  |  |  |
Interest expense on long-term debt | 17,463 |  |  | 21,175 |  |  |  |  |
Interest income, net | $ | (34,409) |  |  | $ | (45,950) |  |  |  |  |
Recently issued accounting standards. In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. It requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation and the amount of income taxes paid as well as additional income tax related amounts. The new guidance is effective for annual reporting periods beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its disclosures in the consolidated financial statements.

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