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What changed in Ross Stores's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Ross Stores's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+250 added−281 removedSource: 10-K (2023-03-28) vs 10-K (2022-03-29)

Top changes in Ross Stores's 2023 10-K

250 paragraphs added · 281 removed · 209 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAdvertising Advertising for Ross Dress for Less relies on a mix of television and digital channels to communicate the Ross value proposition—savings off the same brands carried at leading department or specialty stores every day. This strategy reflects our belief that a mix of channels is necessary to reach our customer.
Biggest changeInformation on the size and locations of our distribution centers and warehouse facilities is found in ITEM 2. PROPERTIES. Marketing and Advertising We use a variety of marketing and advertising media to communicate our value proposition to customers—savings off the same brands carried at department or specialty stores every day.
On a weekly basis our buyers review specified departments in our stores for possible markdowns based on the rate of sale, as well as at the end of fashion seasons, to promote faster turnover of merchandise inventory and to accelerate the flow of fresh product.
Our buyers review specified departments in our stores for possible markdowns based on the rate of sale on a weekly basis, as well as at the end of fashion seasons, to promote faster turnover of merchandise inventory and to accelerate the flow of fresh product.
Competition We believe the principal competitive factors in the off-price retail apparel and home fashion industry are offering significant discounts on brand name merchandise, offering a well-balanced assortment that appeals to our target customers, and consistently providing store environments that are convenient and easy to shop. To execute this concept, we continue to make strategic investments in our merchandising organization.
Competition We believe the principal competitive factors in the off-price retail apparel and home fashion industry are offering significant discounts on brand name merchandise, offering a well-balanced assortment that appeals to our target customers, and consistently providing store environments that are convenient and easy to shop. To execute this concept, we continue to make strategic investments in our organization.
Our merchandising strategy incorporates a combination of off-price buying techniques to purchase advance-of-season, in-season, and past-season merchandise for both Ross and dd’s DISCOUNTS. We believe nationally recognized name brands sold at compelling discounts will continue to be an important determinant of our success. We generally leave the brand name label on the merchandise we sell.
Our merchandising strategy incorporates a combination of off-price buying techniques to purchase advance-of-season, in-season, and past-season merchandise for both Ross and dd’s DISCOUNTS. We believe merchandise with nationally recognized name brands sold at compelling discounts will continue to be an important determinant of our success. We generally leave the brand name label on the merchandise we sell.
We have established merchandise assortments that we believe are attractive to our target customers. Although we offer fewer classifications of merchandise than most department stores, we generally offer a large selection within each classification with a wide assortment of vendors, labels, prices, colors, styles, and fabrics within each size or item.
We have established merchandise assortments that we believe are attractive to our target customers. Although we may offer fewer classifications of merchandise than most department stores, we generally offer a large selection within each classification, with a wide assortment of vendors, labels, prices, colors, styles, and fabrics within each size or item.
We provide our associates the opportunity to give back to their communities and make a social impact through various programs such as our matching gift program, volunteer time off for eligible associates, and a scholarship program for our associates and their dependents.
Community and social impact. We provide our associates the opportunity to give back to their communities and make a social impact through various programs such as our matching gift program, volunteer time off for eligible associates, and a scholarship program for our associates and their dependents.
Unlike most department and specialty stores, we typically do not require that manufacturers provide promotional allowances, co-op advertising allowances, return privileges, split shipments, drop shipments to stores, or delayed deliveries of merchandise. For most orders, delivery is made to one of our distribution centers. These flexible requirements further enable our buyers to obtain significant discounts on purchases.
Unlike most department and specialty stores, we typically do not require that vendors or manufacturers provide promotional allowances, co-op advertising allowances, return privileges, drop shipments to stores, or delayed deliveries of merchandise. For most orders, delivery is made to one of our distribution centers. These flexible requirements further enable our buyers to obtain significant discounts on purchases.
Our store’s sales area is based on a prototype single floor design with a racetrack aisle layout. A customer can locate desired departments by signs displayed just below the ceiling of each department. We enable our customers to select among sizes and prices through prominent category and sizing markers.
Our store’s sales area is based on a prototype single floor design with a racetrack aisle layout. A customer can locate desired departments by signs displayed just below the ceiling of each department. We enable our customers to select among sizes and styles through prominent category and sizing markers.
As such, the aging of packaway varies by merchandise category and seasonality of purchase, but typically packaway remains in storage less than six months. In fiscal 2021, we continued our emphasis on this important sourcing strategy in response to compelling opportunities available in the marketplace.
As such, the aging of packaway varies by merchandise category and seasonality of purchase, but typically packaway remains in storage less than six months. In fiscal 2022, we continued our emphasis on this important sourcing strategy in response to compelling opportunities available in the marketplace.
We believe a key element of our success at both Ross and dd’s DISCOUNTS is our organized, attractive, and easy-to-shop in-store environments which allow customers to shop at their own pace. While our stores promote a self-service, treasure-hunt shopping experience, the layouts are designed to enhance customer convenience in their merchandise presentation, dressing rooms, checkout, and merchandise return areas.
We believe a key element of our success at both Ross and dd’s DISCOUNTS is our organized and easy-to-shop in-store environment which allows customers to shop at their own pace. While our stores promote a self-service, treasure-hunt shopping experience, the layouts are designed to enhance customer convenience in their merchandise presentation, dressing rooms, checkout, and merchandise return areas.
We also operate 295 dd’s DISCOUNTS stores in 21 states as of January 29, 2022. dd’s DISCOUNTS features more moderately-priced 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.
We also operate 322 dd’s DISCOUNTS stores in 21 states as of January 28, 2023. dd’s DISCOUNTS features more moderately-priced 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.
We face a challenging macro-economic and retail environment that creates intense competition for business from online retailers, department stores, specialty stores, discount stores, warehouse stores, other off-price retailers, and manufacturer-owned outlet stores, many of which are units of large national or regional chains that have substantially greater resources.
We face a challenging and rapidly changing macroeconomic and retail environment that creates intense competition for our business from online retailers, department stores, specialty stores, discount stores, warehouse stores, other off-price retailers, and manufacturer-owned outlet stores, many of which are units of large national or regional chains that have substantially greater resources.
We refer to our fiscal years ended January 29, 2022, January 30, 2021, and February 1, 2020 as fiscal 2021, fiscal 2020, and fiscal 2019, respectively, each of which were 52-week years.
We refer to our fiscal years ended January 28, 2023, January 29, 2022, and January 30, 2021 as fiscal 2022, fiscal 2021, and fiscal 2020, respectively, each of which were 52-week years.
We care about our associates and the communities we serve. We are committed to building diverse teams and an inclusive culture that respects, values, and celebrates the diversity of backgrounds, identities, and ideas of those who work and shop with us.
Diversity, equality, and inclusion. We care about our associates and the communities we serve. We are committed to building diverse teams and an inclusive culture that respects, values, and celebrates the diversity of backgrounds, identities, and ideas of those who work and shop with us. We are focused on executing strategies to support our commitment to diversity, equality, and inclusion.
Ross is the largest off-price apparel and home fashion chain in the United States, with 1,628 locations in 40 states, the District of Columbia, and Guam, as of January 29, 2022.
Ross is the largest off-price apparel and home fashion chain in the United States, with 1,693 locations in 40 states, the District of Columbia, and Guam, as of January 28, 2023.
Merchandise can be shipped to stores in-season, allowing us to get in-season goods into our stores at great values, or can be stored as packaway merchandise. Packaway merchandise is purchased with the intent that it will be stored in our warehouses until a later date, which may even be the beginning of the same selling season in the following year.
Upon receipt, merchandise can be shipped to stores in-season or can be stored in our warehouses as packaway merchandise. Packaway merchandise is purchased with the intent that it will be stored in our warehouses until a later date, which may even be the beginning of the same selling season in the following year.
Among the factors which have enabled us to do this are: labor costs that are generally lower than full-price department and specialty stores due to a store design that creates a self-service retail format and due to the utilization of labor saving technologies; economies of scale with respect to general and administrative costs resulting from centralized merchandising, marketing, and purchasing decisions; and flexible store layout criteria which facilitate conversion of existing buildings to our formats.
Among the factors which have enabled us to do this are: labor costs that are generally lower than full-price department and specialty stores due to a store design that creates a self-service retail format and due to the utilization of labor saving technologies; economies of scale with respect to general and administrative costs resulting from centralized merchandising, marketing, and purchasing decisions; and flexible store layout criteria which facilitate conversion of existing buildings to our formats. 5 Information Systems We continue to invest in new information systems and technology to provide a platform for growth over the next several years.
We provide refunds or store credit on all merchandise (not used, worn, or altered) returned with a receipt within 30 days. Merchandise returns having a receipt older than 30 days are exchanged or refunded with store credit. Operating Costs Consistent with the other aspects of our business strategy, we strive to keep operating costs as low as possible.
Merchandise returns having a receipt older than 30 days are exchanged or refunded with store credit. Operating Costs Consistent with the other aspects of our business strategy, we strive to keep operating costs as low as possible.
A similar pricing strategy is in place at dd’s DISCOUNTS where prices are compared to those in moderate department and discount stores. Stores As of January 29, 2022, we operated a total of 1,923 stores comprised of 1,628 Ross stores and 295 dd’s DISCOUNTS stores.
A similar pricing strategy is in place at dd’s DISCOUNTS where prices are compared to those in moderate department and discount stores. Stores As of January 28, 2023, we operated a total of 2,015 stores comprised of 1,693 Ross stores and 322 dd’s DISCOUNTS stores.
At the end of fiscal 2021, we had over 900 merchants for Ross and dd’s DISCOUNTS combined. The Ross and dd’s DISCOUNTS buying organizations are separate and distinct, and each includes merchandise management, buyers, and assistant buyers. Ross and dd’s DISCOUNTS buyers have on average seven years of experience, including merchandising positions with other retailers.
The Ross and dd’s DISCOUNTS buying organizations are separate and distinct, and each includes merchandise management, buyers, and assistant buyers. Ross and dd’s DISCOUNTS buyers have on average seven years of experience, including merchandising positions with other retailers.
We also operate a smaller buying office located in Boston. These strategic locations allow our buyers to be in the market frequently, sourcing opportunities and negotiating purchases with vendors and manufacturers. Thes e locations also enable our buyers to strengthen vendor relationships—a key element to the success of our off-price buying strategies.
These strategic locations allow our buyers to be in the market frequently, sourcing opportunities and negotiating purchases with vendors and manufacturers. Thes e locations also enable our buyers to strengthen vendor relationships—a key element to the success of our off-price buying strategies. At the end of fiscal 2022, we had over 900 merchants for Ross and dd’s DISCOUNTS combined.
Our associates, managers, and executives may participate in technical and leadership development activities. We support associates interested in leadership roles by offering opportunities to gain experience and build the skills necessary to advance within the Company. We are proud that many store leaders started their careers with us as retail associates. Diversity, equality, and inclusion.
Our associates, managers, and executives may participate in technical and leadership development activities. We support associates interested in leadership roles by offering opportunities to gain experience and build the skills necessary to advance within the Company. 6 Compensation and benefits.
Trademarks The trademarks for ROSS ® , Ross Dress For Less ® , and dd’s DISCOUNTS ® have been registered with the United States Patent and Trademark Office. Human Capital As of January 29, 2022, we had approximately 100,000 total associates, which includes both full- and part-time associates. Additionally, we hire temporary associates, especially during peak seasons.
Trademarks The trademarks for ROSS ® , Ross Dress For Less ® , and dd’s DISCOUNTS ® have been registered with the United States Patent and Trademark Office. Human Capital As of January 28, 2023, we had approximately 101,000 total a ssociates, which includes both full- and part-time associates in our stores, distribution centers, and buying and corporate offices.
Packaway accounted for approximately 40% and 38% of total inventories as of January 29, 2022 and January 30, 2021, respectively. We believe the strong discounts we offer on packaway merchandise are one of the key drivers of our business results. Our primary buying offices are located in New York City and Los Angeles, the nation’s two largest apparel markets.
Packaway accounted for approximately 40% of total inventories as of January 28, 2023 and January 29, 2022. Our primary buying offices are located in New York City and Los Angeles, the nation’s two largest apparel markets. We also operate a smaller buying office located in Boston.
Our merchandise offerings include, but are not limited to, apparel (including footwear and accessories), small furniture, home accents, bed and bath, beauty, toys, luggage, gourmet food, cookware, jewelry and watches. Purchasing. We have a large network of merchandise vendors and manufacturers for both Ross and dd’s DISCOUNTS and believe we have adequate sources of first-quality merchandise to meet our requirements.
Our merchandise offerings include, but are not limited to, apparel, footwear, accessories, small furniture, home accents, bed and bath, beauty, toys, luggage, gourmet food, cookware, jewelry and watches, and pet accessories. Purchasing.
The information found on our corporate website is not part of this report, or of any other report or regulatory filing we file with or furnish to the Securities and Exchange Commission.
That report and the other information found on our corporate website are not part of this report or of any other report or regulatory filing we file with or furnish to the Securities and Exchange Commission. 7 Executive Officers of the Registrant The following sets forth the names and ages of our executive officers, indicating each person’s principal occupation or employment during at least the past five years.
We purchase the vast majority of our merchandise directly from manufacturers. Despite the ongoing supply chain congestion, we have been able to suf ficiently source merchandise inventory. We believe our ability to effectively execute certain off-price buying strategies is a key factor in our success.
We have a large network of merchandise vendors and manufacturers for both Ross and dd’s DISCOUNTS and believe we have adequate sources of first-quality merchandise to meet our requirements. We purchase the vast majority of our merchandise directly from manufacturers. We believe our ability to effectively execute certain off-price buying strategies is a key factor in our success.
We have no associates that are covered by a collective bargaining agreement. Management considers the relationship between the Company and our associates to be good. Our associates play essential roles in delivering great value to our customers.
The majority of these associates worked in our retail stores. Additionally, we hire temporary associates, especially during peak seasons. We have no associates that are covered by a collective bargaining agreement. Management considers the relationship between the Company and our associates to be strong.
Throughout our organization, we recognize and appreciate the importance of attracting, retaining, and developing our associates and we have a number of key programs to do so. Talent development. The professional growth of our associates is important to our success as a business.
Throughout our organization, we recognize and appreciate the importance of attracting, retaining, and developing our associates and we have a number of key programs to do so. Our culture. Values start with our people. At Ross, we strive to do what is right for our associates, customers, and the communities we serve.
These initiatives support future growth, the execution and achievement of our plans, ongoing stability and compliance. Distribution We operate distribution processing facilities where we receive and ship all of our merchandise to our stores. These distribution centers are large, highly automated, and built to suit our specific off-price business model. We also operate warehouse facilities for packaway storage.
Current initiatives include continued enhancements to our stores, supply chain, merchandising, and cybersecurity systems. These initiatives support future growth, the execution and achievement of our plans, ongoing stability, and compliance. Distribution We operate distribution processing facilities where we receive and ship all of our merchandise to our stores.
Our stores have shopping carts and/or baskets available at the entrance for customer convenience. Cash registers are primarily located at store exits for customer ease and efficient staffing. In response to the health pandemic from the novel coronavirus (COVID-19), we have implemented enhanced safety protocols for our customers and associates. We accept a variety of payment methods.
Our stores have shopping carts and/or baskets available at the entrance for customer convenience. Cash registers are primarily located at store exits for customer ease and efficient staffing. We accept a variety of payment methods. We provide refunds or store credit on all merchandise (not used, worn, or altered) returned with a receipt within 30 days.
The retail apparel and home-related businesses may become even more competitive in the future. Available Information The internet address for our corporate website is www.rossstores.com.
The retail apparel and home-related businesses may become even more competitive in the future. Seasonality Although our off-price business is subject to less seasonality than traditional retailers, sales are generally higher during the second half of the year, which includes the back-to-school and holiday seasons. Available Information The internet address for our corporate website is www.rossstores.com.
Our stores are located predominantly in community and neighborhood shopping centers in heavily populated urban and suburban areas. Where the size of the market and real estate opportunities permit, we cluster Ross stores to benefit from economies of scale in advertising, distribution, and field management. We do the same for dd’s DISCOUNTS stores.
Where the size of the market and real estate opportunities permit, our real estate strategy is to cluster Ross stores with the objective to increase our market penetration and to benefit from economies of scale in advertising, distribution, field management, and other overhead.
Within digital channels, we continue to grow social, digital video, and audio, to communicate our brand position. Advertising for dd’s DISCOUNTS is primarily focused on radio, both broadcast and digital, social media, and new store grand openings.
This includes a mix of television, digital channels, radio, and new store grand openings. Within digital channels, we continue to grow our social media, digital video, and digital audio presence to communicate our brand positions. We believe that a mix of channels is important to reach our customers.
We believe that our distribution centers and warehouses with their current expansion capabilities will provide adequate processing and storage capacity to support our current store growth. Information on the size and locations of our distribution centers and warehouse facilities is found under “Properties” in Item 2.
Shipments are made by contract carriers to the stores three to six times per week depending on location. We believe that our distribution centers and warehouses with their current expansion capabilities will provide adequate processing and storage capacity to support our near term store growth plans.
We also continue to make improvements to our merchandising systems to strengthen our ability to plan, buy, and allocate product to our stores. We operate in an attractive sector of retail that we anticipate will be facing reduced brick and mortar competition given the significant number of recent retail closures and bankruptcies.
We also continue to make improvements to our merchandising systems to strengthen our ability to plan, buy, and allocate product to our stores. We operate in an attractive sector of retail which offers both value and convenience. We believe that we are well-positioned within the off-price retail apparel and home fashion industry to compete based on these factors.
We utilize a combination of our own, and third-party, cross dock facilities to distribute merchandise to stores on a regional basis. Shipments are made by contract carriers to the stores three to six times per week depending on location.
These distribution centers are large, highly automated, and built to suit our specific off-price business model. We also operate warehouse facilities for packaway storage. We utilize a combination of owned, leased, and third-party cross-dock facilities to distribute merchandise from distribution centers to stores on a regional basis.
Removed
In response to COVID-19, we implemented additional processes and procedures to facilitate social distancing, to enhance cleaning and sanitation activities, and to provide personal protective equipment to our associates, which has increased our operating costs.
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Our stores are located predominantly in community and neighborhood shopping centers in heavily populated urban and suburban areas.
Removed
We have incurred and expect to continue to incur elevated operating costs during the COVID-19 pandemic. 5 Information Systems We continue to invest in new information systems and technology to provide a platform for growth over the next several years. Current initiatives include continued enhancements to our stores, distribution, merchandising, merchandise planning, and cybersecurity systems.
Added
When evaluating a new store location, we consider factors such as the availability and quality of potential sites, demographic characteristics, competition, and population density of the local trade area. In addition, we continue to consider opportunistic real estate acquisitions.
Removed
We are focused on executing strategies to support our commitment to diversity, equality, and inclusion. 6 Community and social impact.
Added
Where possible, we obtain sites in buildings requiring minimal alterations, allowing us to establish stores in new locations in a relatively short period of time and at reasonable costs in a given market. We do the same for dd’s DISCOUNTS stores.
Removed
We believe that we remain well-positioned within the off-price retail apparel and home fashion industry to compete based on these factors. Nevertheless, the retail apparel market is highly fragmented and competitive.
Added
Our associates play essential roles in not only delivering great values to our customers but also evolving and strengthening the culture at Ross. We strive to have a workforce that reflects our values, supports our business growth, and strengthens our communities.
Added
We are also committed to promoting an inclusive culture and work environment in which our associates are treated with dignity and respect. Talent development. The professional growth of our associates is important to our success as a business.
Added
We are dedicated to providing our associates with competitive pay and benefits, a safe working environment, recognition for achievements, channels to share opinions and ideas, opportunities to give back, support for educational advancement, and merchandise and other discounts. We are also continuing to invest in our associates with programs that assist with physical, emotional, and financial wellness.
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Nevertheless, the retail apparel and home fashion markets are highly fragmented and competitive.
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Our annual Corporate Social Responsibility Report is found in the Social Responsibility section of our corporate website.
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The term of office is at the discretion of our Board of Directors. Name Age Position Barbara Rentler 65 Chief Executive Officer Michael J.
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Hartshorn 55 Group President and Chief Operating Officer Michael Kobayashi 58 President and Chief Capability Officer Brian Morrow 63 President and Chief Merchandising Officer, dd’s DISCOUNTS Adam Orvos 58 Executive Vice President and Chief Financial Officer Ms. Rentler has served as Chief Executive Officer and a member of the Board of Directors since 2014.
Added
From 2009 to 2014, she was President and Chief Merchandising Officer, Ross Dress for Less and Executive Vice President, Merchandising, from 2006 to 2009. She also served at dd’s DISCOUNTS as Executive Vice President and Chief Merchandising Officer from 2005 to 2006, and Senior Vice President and Chief Merchandising Officer from 2004 to 2005.
Added
Prior to that, she held various merchandising positions since joining the Company in 1986. Mr. Hartshorn has served as Group President and Chief Operating Officer since August 2019 and a member of the Board of Directors since March 2021.
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Previously, he was Group Executive Vice President, Finance and Legal, Chief Financial Officer in 2019; Executive Vice President, Chief Financial Officer from 2018 to 2019; Group Senior Vice President, Chief Financial Officer from 2015 to 2018; Senior Vice President and Chief Financial Officer from 2014 to 2015; and Senior Vice President and Deputy Chief Financial Officer from 2012 to 2014.
Added
He was also Group Vice President, Finance and Treasurer from 2011 to 2012, and Vice President, Finance and Treasurer from 2006 to 2011. From 2002 to 2006, he held a number of management roles in the Ross IT and supply chain organizations. He initially joined the Company in 2000 as Director and Assistant Controller.
Added
For seven years prior to joining Ross, Mr. Hartshorn held various financial roles at The May Department Stores Company. Mr. Kobayashi has served as President and Chief Capability Officer since February 2022.
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Prior to this role, he served as President, Operations and Technology from 2019 to 2022; Group Executive Vice President, Supply Chain, Merchant Operations, and Technology from 2014 to 2019; and Executive Vice President, Supply Chain, Allocation, and Chief Information Officer from 2010 to 2014.
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Previously, he was Group Senior Vice President, Supply Chain and Chief Information Officer from 2008 to 2010, and Senior Vice President and Chief Information Officer from 2004 to 2008. Prior to joining Ross, Mr. Kobayashi was a Partner with Accenture, providing consulting services to clients in Accenture’s Retail & Consumer Goods practice. Mr.
Added
Morrow has served as President and Chief Merchandising Officer, dd’s DISCOUNTS since December 2015. Prior to joining Ross, Mr. Morrow served as President, Chief Merchandising Officer of Stein Mart from 2014 to 2015 and Executive Vice President and Chief Merchandising Officer from 2010 to 2014.
Added
From 2008 to 2009, he served as Executive Vice President, General Merchandise Manager at Macy’s West. He also held roles as Senior Vice President, General Merchandise Manager at Mervyn’s in 2008 and Macy’s North/Marshall Field’s from 2006 to 2008. For approximately 20 years prior to this, Mr. Morrow held various merchandising roles at The May Department Stores Company. Mr.
Added
Orvos has served as Executive Vice President and Chief Financial Officer since October 2021. Mr. Orvos joined Ross in January 2021 as Group Senior Vice President, Supply Chain Administration. Prior to joining Ross, Mr.
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Orvos served as Senior Vice President, Retail Finance and Global Financial Planning and Analysis at Lowe’s from 2019 to 2020; Chief Financial Officer and Chief Operating Officer at Neiman Marcus from 2018 to 2019; and Executive Vice President, Retail and then Chief Executive Officer at Total Wine & More from 2016 to 2017. Mr.
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Orvos held several senior management positions at Belk Department Stores from 2006 to 2016, where he eventually became its C hief Financial Officer. For almost 20 years prior to this, Mr. Orvos held various financial roles at The May Department Stores Company, including Chief Financial Officer of their Foley’s division. 8

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+6 added−14 removed57 unchanged
Biggest changeThe United States and other countries continue to experience a prolonged, major global COVID-19 pandemic, including additional outbreaks driven by new virus variants, with related, significant disruptions and impacts to retail operations and supply chains, and to general economic activities. The situation continues to be unprecedented and rapidly changing, and has unknown duration and severity.
Biggest changeAny such disruptions could negatively impact our financial performance or financial condition. The COVID-19 pandemic may continue to adversely affect our business, operations, and financial performance and condition. The United States and other countries continue to experience a global pandemic with related, potentially significant, disruptions and cost impacts to retail operations and supply chains, and to general economic activities.
To the extent that our vendors are located overseas or rely on overseas sources for a large portion of their products, any event causing a disruption, delay, or increase in the cost of imports, including the imposition of import or other restrictions such as product detention, war, acts of terrorism, natural disasters, or public health issues such as the current COVID-19 pandemic (or other, future pandemics) could adversely affect our business.
To the extent that our vendors are located overseas or rely on overseas sources for a large portion of their products, any event causing a disruption, delay, or increase in the cost of imports, including the imposition of import or other restrictions such as product detention, war, acts of terrorism, natural disasters, or public health issues such as the COVID-19 pandemic (or other future pandemics) could adversely affect our business.
These may include lawsuits, inquiries, demands, or other claims or proceedings by governmental entities and private plaintiffs, including those relating to employment and employee benefits (including classification, employment rights, discrimination, harassment, wage and hour, and retaliation), securities, real estate, tort, commercial, consumer protection, privacy, product compliance and safety, advertising, environmental, comparative pricing, product labeling, intellectual property, tax, escheat, and whistle-blower claims.
These may include lawsuits, inquiries, demands, or other claims or proceedings by governmental entities and private plaintiffs, including those relating to employment and employee benefits (including classification, employment rights, discrimination, harassment, wage and hour, and retaliation), workplace safety, securities, real estate, tort, commercial, consumer protection, privacy, product compliance and safety, advertising, environmental, comparative pricing, product labeling, intellectual property, tax, escheat, and whistle-blower claims.
Although our vendor arrangements typically place contractual responsibility on the vendor for resulting liability and we generally rely on our vendors to provide authentic merchandise that matches the stated quality attributes and complies with applicable product safety and other laws, vendor non-compliance with consumer product safety laws may subject us to product recalls, make certain products unsalable, or require us to incur significant compliance costs.
Although our vendor arrangements typically place contractual responsibility on the vendor for resulting liability and we generally rely on our vendors to provide authentic merchandise that matches the stated quality attributes and complies with applicable product safety and other laws, any non-compliance with consumer product safety laws may subject us to product recalls, make certain products unsalable, or require us to incur significant compliance costs.
Natural or other disasters, such as the current COVID-19 pandemic (or other, future pandemics), wildfires, earthquakes, hurricanes, tornadoes, floods, or other extreme weather and climate conditions, or fires, explosions, and acts of war or terrorism, or public health issues, in any of our markets could disrupt our operations or our supply chain, or could shut down, damage, or destroy our stores or distribution facilities.
Natural or other disasters, such as the COVID-19 pandemic (or other future pandemics), wildfires, earthquakes, hurricanes, tornadoes, floods, or other extreme weather and climate conditions, or fires, explosions, and acts of war or terrorism, or public health issues, in any of our markets could disrupt our operations or our supply chain, or could shut down, damage, or destroy our stores or distribution facilities.
In addition to the general uncertainty and overall risk from potential changes in U.S. laws and policies, as we make business decisions in the face of uncertainty as to potential changes, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail to effectively adapt our business strategies and manage the adjustments that are 14 necessary in response to those changes.
In addition to the general uncertainty and overall risk from potential changes in U.S. laws and policies, as we make business decisions in the face of uncertainty as to potential changes, we may incorrectly anticipate the outcomes, miss out on business opportunities, or fail to effectively adapt our business strategies and manage the adjustments that are necessary in response to those changes.
Failure to correctly anticipate and match the trends, preferences, and demands of our customers could adversely affect our business, financial condition, and operating results. 9 Adverse and/or unseasonable weather may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores.
Failure to correctly anticipate and match the trends, preferences, and demands of our customers could adversely affect our business, financial condition, and operating results. Adverse and/or unseasonable weather may affect shopping patterns and consumer demand for seasonal apparel and other merchandise, and may result in temporary store closures and disruptions in deliveries of merchandise to our stores.
New markets may have competitive conditions, consumer tastes, and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. Our limited operating experience and limited brand recognition in new markets may require us to build brand awareness in that market through greater investments in advertising and promotional activity than we originally planned.
New markets may have competitive conditions, consumer tastes, and discretionary spending patterns that are more difficult to predict or satisfy than our existing markets. Our limited operating experience and limited brand recognition in new markets may require us to build brand awareness in that market through greater investments in marketing, advertising, and promotional activity than we originally planned.
If our information systems or our back-up systems are damaged or cease to function properly, we may have to make significant investments to fix or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in our computer systems could have a material adverse effect on our business and results of operations.
If our information systems or our back-up systems are damaged or cease to 13 function properly, we may have to make significant investments to fix or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in our computer systems could have a material adverse effect on our business and results of operations.
The COVID-19 pandemic and accompanying economic impacts may change shopping behavior so that our predictions and sales plans become less accurate, and that may lead us to have higher than usual levels of slow-moving or non-salable inventory at our prior planned price levels.
The COVID-19 pandemic and accompanying economic impacts may continue to change shopping behavior so that our predictions and sales plans become less accurate, and that may lead us to have higher than usual levels of slow-moving or non-salable inventory at our prior planned price levels.
Inflation may cause our costs to purchase inventory to be higher than we planned, and we may not be able to sell the inventory to our customers at correspondingly increased prices, resulting in decreased profit margins. We also may have insufficient inventory to meet customer demand, leading to lost sales opportunities.
Inflation may continue to cause our costs to purchase inventory to be higher than we planned, and we may not be able to sell the inventory to our customers at correspondingly increased prices, resulting in decreased profit margins. We also may have insufficient inventory to meet customer demand, leading to lost sales opportunities.
Our ability to meet or exceed our operating performance targets depends upon the continuous, sufficient availability of high quality merchandise that we can acquire at prices sufficiently below those paid by conventional retailers and that represent a value to our customers.
Our ability to meet or exceed our operating performance targets depends upon the continuous, sufficient availability of high quality merchandise that we can acquire at prices 10 sufficiently below those paid by conventional retailers and that represent a value to our customers.
The extent and duration of the impact from the COVID-19 pandemic on our business and financial results will depend largely on future developments, including the duration and spread of outbreaks within the U.S., regional surges in infection, vaccination rates, potential acquired immunity, the effectiveness of vaccines in controlling current and future variants of the virus, the response by all levels of government in their efforts to contain the outbreak and to mitigate the resulting economic disruptions, and the related impact on consumer confidence, shopping behavior, and spending, all of which are highly uncertain and cannot be predicted.
The extent and duration of the impacts from the COVID-19 pandemic on our business and our financial results will depend largely on future developments, including the duration and spread of outbreaks within the U.S., regional surges in infection, vaccination rates, and acquired immunity rates, the effectiveness of vaccines in controlling current and future variants of the virus, the response by all levels of government in their efforts to contain the outbreak and to mitigate the resulting economic disruptions, and the related impact on consumer confidence, shopping behavior, and spending, all of which are highly uncertain and cannot be predicted.
Because a significant portion of the apparel and other goods we sell is originally manufactured in other countries, constraints on the availability of shipping capacity, changes in transportation costs or in U.S. tariffs, trade relationships, or tax policies, and natural disasters, or public health issues such as the current COVID-19 pandemic (or other, future pandemics), that reduce the supply or increase the 10 relative cost of imported goods, could also result in disruptions to our existing supply relationships.
Because a significant portion of the apparel and other goods we sell is originally manufactured in other countries, constraints on the availability of shipping capacity, changes in transportation costs or in U.S. tariffs, trade relationships, or tax policies, and natural disasters, or public health issues such as the COVID-19 pandemic (or other future pandemics), that reduce the supply or increase the relative cost of imported goods, could also result in disruptions to our existing supply relationships.
Regardless of fault, any real or perceived issues with the quality and safety of merchandise we offer (particularly products such as food and children’s items), issues with the authenticity of merchandise, or our inability or that of our vendor to comply on a timely basis with laws and regulatory requirements, could adversely affect our reputation, result in lost sales, inventory write-offs, uninsured product liability or other legal claims, penalties or losses, merchandise recalls, and increased costs.
Regardless of fault, any real or perceived issues with the quality and safety of merchandise we offer (particularly products such as food and children’s items), issues with the authenticity of merchandise, or our inability or that of our vendors, to comply on a timely basis with laws and regulatory requirements, could adversely affect our reputation, result in lost sales, inventory write-offs, uninsured product liability or other legal claims, penalties or losses, merchandise recalls, and increased costs.
As a result of changes in shopping behaviors due to the COVID-19 pandemic, disruptions to supply chains and store operations, and inflation, we are at risk for inventory imbalances and the potential for higher than normal levels of markdowns to sell through our inventory, increased cost of goods, and for lost sales due to insufficient inventory to meet customer demand, any of which would negatively affect our gross margins and our operating results.
As a result of changes in shopping behaviors due to inflation, the COVID-19 pandemic, and disruptions to supply chains and store operations, we are at risk for inventory imbalances and the potential for higher than normal levels of markdowns to sell through our inventory, increased cost of goods, and for lost sales due to insufficient inventory to meet customer demand, any of which would negatively affect our sales, gross margin, and operating results.
Such disruptions may result from 11 public health issues such as the current COVID-19 pandemic (or other, future pandemics), cyberattacks, damage or destruction to our distribution centers, weather-related events, natural disasters, trade restrictions, tariffs, third-party strikes or ineffective cross dock operations, work stoppages or slowdowns, shipping capacity constraints, supply or shipping interruptions, or other factors beyond our control.
Such disruptions may result from public health issues such as the COVID-19 pandemic (or other future pandemics), cyberattacks, damage or destruction to our distribution centers, weather-related events, natural disasters, trade restrictions, tariffs, third-party strikes or ineffective cross-dock operations, work stoppages or slowdowns, shipping capacity constraints, supply or shipping interruptions, or other factors beyond our control.
We depend on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices. Opportunistic buying, lean inventory levels, and frequent inventory turns are critical elements of our off-price business strategy.
STRATEGIC RISKS We depend on the market availability, quantity, and quality of attractive brand name merchandise at desirable discounts, and on the ability of our buyers to purchase merchandise to enable us to offer customers a wide assortment of merchandise at competitive prices. Opportunistic buying, lean inventory levels, and frequent inventory turns are critical elements of our off-price business strategy.
Although our off-price business is historically subject to less seasonality than traditional retailers, we may still experience unexpected decreases in sales from time to time, which could result in increased markdowns and reduced margins. Significant operating expenses, such as rent expense and associate salaries, do not adjust proportionately with our sales.
Although our off-price business is historically subject to less seasonality than traditional retailers, we may still experience unexpected decreases in sales from time to time, which could result in increased markdowns and reduced margins. Significant operating expenses, such as rent expense and associate wages, do not adjust proportionately with our sales.
Our information systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, cyberattacks, computer viruses, internal or external security breaches, catastrophic events such as severe storms, fires, earthquakes, floods, acts of terrorism, and design or usage errors by our employees or by third parties.
Our information systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, cyberattacks, computer viruses, internal or external security breaches, catastrophic events such as severe storms, fires, earthquakes, floods, acts of terrorism, and design or usage errors by our associates or by third parties.
Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information concerning our Company may be posted on such platforms at any time.
Many social media and other online platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information concerning our Company may be posted on such platforms at any time.
The use of social media platforms, including blogs, social media websites, and other forms of internet-based communications which allow individuals access to a broad audience of consumers and other interested persons, continues to increase. The availability of information (whether correct or erroneous) on social media platforms is virtually immediate, as is its impact.
The use of social media and other online platforms, including blogs, applications, websites, and other forms of internet-based communications, which allow individuals access to a broad audience of consumers and other interested persons, continues to increase. The availability of information (whether correct or erroneous) on social media and other online platforms is virtually immediate, as is its impact.
We continue to be involved in a number of employment-related lawsuits, including class/representative actions which are primarily in California. 12 We are subject to federal, state, and local rules and regulations in the United States, and to various international laws, which change from time to time.
We continue to be involved in a number of employment-related lawsuits, including class/representative actions which are primarily in California. 15 We are subject to federal, state, and local rules and regulations in the United States, and to various international laws, which change from time to time.
These risks could adversely affect our revenues and expenses, increase our effective tax rates, and reduce our profitability. We may experience volatility in revenues and earnings. Our business has slower and busier periods based on holiday and back-to-school seasons, weather, and other factors.
These risks could adversely affect our revenues and expenses, increase our effective tax rates, and reduce our profitability. GENERAL RISKS We may experience volatility in sales and earnings. Our business has slower and busier periods based on holiday and back-to-school seasons, weather, and other factors.
Governmental authorities in affected cities and regions may take actions in an effort to protect people and property while permitting lawful and non-violent protests, including curfews and restrictions on business operations, which may be disruptive to our operations.
Governmental authorities in affected cities and regions may take action in an effort to protect people and property while permitting lawful and non-violent protests, including curfews and restrictions on business operations, which may be disruptive to our operations.
Any increase in labor costs may adversely impact our profitability or, if we fail to pay such higher wages, may result in increased turnover. Excessive turnover may result in higher costs associated with finding, hiring, and training new associates.
Any increase in labor costs may adversely impact our profitability or, if we fail to pay competitive wages, may result in increased turnover. Excessive turnover may result in higher costs associated with finding, hiring, and training new associates.
The substantial sales growth in e-commerce within the last decade has also encouraged the entry of many new competitors, new business models, and an increase in competition from established companies looking for ways to create successful on-line shopping alternatives.
The substantial sales growth in e-commerce within the last decade has also encouraged the entry of many new competitors, new business models, and an increase in competition from established companies looking for ways to create successful online shopping alternatives.
To support our continuing operations, our new store and distribution center growth plans, our quarterly dividends, and our stock repurchase program, we must maintain sufficient liquidity; the COVID-19 pandemic and related economic disruptions are adding significant uncertainty and challenges.
To support our continuing operations, our new store and distribution center growth plans and other capital investment plans, our quarterly dividends, and our stock repurchase program, we must maintain sufficient liquidity; the COVID-19 pandemic and related economic disruptions are adding significant uncertainty and challenges.
While generally subject to coverage by insurance, the repair of damage to our stores and replacement of lost merchandise may also increase our costs and temporarily disrupt store operations, and we may incur increased operating costs for additional security.
While generally subject to coverage by insurance, the repairs of damage to our stores and replacement of lost merchandise may increase our costs and temporarily disrupt store operations, and we may incur increased operating costs for additional security.
Such an incident could also include alleged acts or omissions by or situations involving our suppliers (or their contractors or subcontractors), the landlord for our stores, or our associates outside of work, and may pertain to social or political issues or protests largely unrelated to our business.
Such an incident could also include alleged acts or omissions by, or situations involving, our vendors (or their contractors or subcontractors), the landlords for our stores, or our associates outside of work, and may pertain to social or political issues or protests largely unrelated to our business.
Our growth strategy is based on successfully expanding our off-price model in current markets and in new geographic regions. There are significant risks associated with our ability to continue to expand our current business and to enter new markets.
To achieve growth, we need to expand in existing markets and enter new geographic markets. Our growth strategy is based on successfully expanding our off-price model in current markets and in new geographic regions. There are significant risks associated with our ability to continue to expand our current business and to enter new markets.
These regulations and related laws frequently change, and the ultimate cost of compliance cannot be precisely estimated. Because of our opportunistic buying strategy, we sometimes obtain merchandise in new categories or from new vendors that we have not dealt with before.
These regulations and related laws frequently change, and the ultimate cost of compliance cannot be precisely estimated. Because of our opportunistic buying strategies, we sometimes obtain merchandise in new categories or from new vendors we have not previously dealt with.
The situation is unprecedented and rapidly changing, and has unknown duration and severity. If we are unable to generate sufficient cash flows from operations to support our activities, our growth plans and our financial performance would be adversely affected. If our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be adversely impacted.
The situation continues to evolve and has an unknown duration and severity. If we are unable to generate sufficient cash flows from operations to support our activities, our growth plans and our financial performance would be adversely affected. If our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be adversely impacted.
The COVID-19 pandemic, the Russia-Ukraine conflict, and other potential, adverse developments in any of these areas, could reduce demand for our merchandise, increase our cost of goods, freight cost, and payroll costs, decrease our inventory turnover, cause greater markdowns, and negatively affect our sales and margins.
Elevated inflation, the Russia-Ukraine conflict, bank failures, the continuing COVID-19 pandemic, and other potential, adverse developments in these or other areas, could reduce demand for our merchandise, increase our cost of goods, freight, and payroll, decrease our inventory turnover, cause greater markdowns, and negatively affect our sales and margins.
These activities, governmental responses, and resulting media coverage may also harm consumer confidence and perceptions of personal well-being and security, which may negatively affect shopping behavior and our sales. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
These activities, governmental responses, and resulting media coverage may also harm consumer confidence and perceptions of personal well-being and security, which may negatively affect shopping behavior and our sales.
RISK FACTORS Our Annual Report on Form 10-K for fiscal 2021, and information we provide in our Annual Report to Stockholders, press releases, and other investor communications, including those on our corporate website, may contain forward-looking statements with respect to anticipated future events, including the rapidly developing challenges (and our plans and responses) from the COVID-19 pandemic and related economic disruptions, our future financial performance, operations, competitive position, and our projected growth, that are all subject to risks and uncertainties that could cause our actual results to differ materially from those forward-looking statements and from our prior expectations and projections.
RISK FACTORS Our fiscal 2022 Annual Report on Form 10-K and information we provide in our Annual Report to Stockholders, press releases, and other investor communications, including those on our corporate website, may contain forward-looking statements with respect to anticipated future events, our projected future financial performance, operations, competitive position, and our planned growth, that are all subject to risks and uncertainties that could cause our actual results to differ materially from those forward-looking statements and from our prior expectations and projections.
There are no significant economic barriers for others to enter our retail sector. We compete for customers, associates, store locations, and merchandise with many other local, regional, and national retailers, traditional department stores, upscale mass merchandisers, other off-price retailers, specialty stores, internet and catalog businesses, and other forms of retail commerce.
We compete for customers, associates, store locations, and merchandise with many other local, regional, and national retailers, traditional department stores, upscale mass merchandisers, other off-price retailers, specialty stores, internet and catalog businesses, and other forms of retail commerce.
Any incident that erodes the trust or confidence of our customers or the general public could adversely affect our reputation and business, particularly if the incident results in significant adverse publicity or governmental inquiry.
Our reputation is partially based on perceptions of various subjective qualities and overall integrity. Any incident that erodes the trust or confidence of our customers or the general public could adversely affect our reputation and business, particularly if the incident results in significant adverse publicity or governmental inquiry.
Information posted may be adverse to our interests or may be inaccurate, which could negatively affect our sales, diminish customer trust, reduce employee morale and productivity, and lead to difficulties in recruiting and retaining qualified associates. The harm may be immediate, without affording us an opportunity for redress or correction.
Information posted may be adverse to our interests or may be inaccurate, which could negatively affect our sales, diminish customer trust, reduce employee morale and productivity, and lead to difficulties in recruiting and retaining qualified associates.
Customer traffic and demand for our merchandise is influenced by our advertising and marketing activities, the name recognition and reputation of our brands, and the location of our stores.
Our ability to effectively advertise and market our business could impact customer traffic and demand for our merchandise. Customer traffic and demand for our merchandise is influenced by our advertising and marketing activities, the name recognition and reputation of our brands, and the location of our stores.
There have been recent demonstrations and protests in cities throughout the United States. While they have generally been peaceful, in some locations they have been accompanied by violence, damage to retail stores, and the loss of merchandise.
While they have generally been peaceful, in some locations they have been accompanied by violence, damage to retail stores, and the loss of merchandise.
There is no assurance that we will be able to attract or retain highly qualified associates in the future, and any failure to do so could have a material adverse effect on our growth, operations, or financial position. We must effectively advertise and market our business.
There is no assurance that we will be able to attract or retain highly qualified associates in the future and any failure to do so could have a material adverse effect on our growth, operations, or financial position. We need to obtain acceptable new store sites with favorable consumer demographics to achieve our planned growth.
If we cannot acquire sites on attractive terms, it could limit our ability to grow or adversely affect the economics of our new stores in various markets. To achieve growth, we need to expand in existing markets and enter new geographic markets.
New stores may not achieve the same sales or profit levels as our existing stores and adding stores to existing markets may adversely affect the sales and profitability of other existing stores. If we cannot acquire sites on attractive terms, it could limit our ability to grow or adversely affect the economics of our new stores in various markets.
We may find it more difficult in new markets to hire, motivate, and retain qualified associates. Consumer problems or legal issues involving the quality, safety, or authenticity of products we sell could harm our reputation, result in lost sales, and/or increase our costs. Various governmental authorities regulate the quality and safety of merchandise we sell.
COMPLIANCE, REGULATORY, AND LEGAL RISKS Consumer problems or legal issues involving the quality, safety, or authenticity of products we sell could harm our reputation, result in lost sales, and/or increase our costs. Various governmental authorities regulate the quality and safety of merchandise we sell.
Competitive pressures in the apparel and home-related merchandise retailing industry are high. The retail industry is highly competitive and the marketplace is highly fragmented, as many different retailers compete for market share by utilizing a variety of store and on-line formats and merchandising strategies. We expect competition to increase in the future.
The retail industry is highly competitive and the marketplace is highly fragmented, as many different retailers compete for market share by utilizing a variety of store and online formats and merchandising strategies. We expect competition to increase in the future. There are limited economic barriers for others to enter the off-price retail sector.
We would then need to aggressively and progressively reduce our selling prices in order to clear out that inventory, which would result in decreased profit margins or losses on sales of that inventory, and adversely affect our results of operations in future periods.
We would then need to aggressively and progressively reduce our selling prices in order to clear out that inventory, which would result in decreased profit margins or losses on sales of that inventory, and adversely affect our results of operations in future periods. 12 As a regular part of our business, we purchase “packaway” inventory with the intent that it will be stored in our warehouses until a later date.
Further, the COVID-19 pandemic has impacted multiple countries, leading to supply related disruptions, including port of exit/entry congestion, shipping delays, and ocean freight cost increases, which may also adversely affect our ability to access and ship products from affected regions. The prolonged, widespread pandemic has adversely impacted global economies, which has resulted in an economic downturn.
Further, the COVID-19 pandemic continues to impact multiple countries, leading to supply related disruptions, including port of exit/entry congestion, shipping delays, and ocean freight cost increases, which may also adversely affect our ability to access and ship products from affected regions. Damage to our corporate reputation or brands could adversely affect our sales and operating results.
Time frames for negotiations and store development vary from location to location and can be subject to unforeseen delays or unexpected cancellations. We may not be able to open new stores or, if opened, operate those new stores profitably. Construction and other delays in store openings could have a negative impact on our business and operating results.
We may not be able to open new stores or, if opened, operate those new stores profitably. Construction and other delays in store openings could have a negative impact on our business and operating results. Additionally, we may not be able to renegotiate our current lease terms which could negatively impact our operating results.
Although we use marketing and advertising programs to attract customers to our stores, particularly through television and digital channels, our competitors may spend more or use different approaches, which could provide them with a competitive advantage. 13 Our advertising and other promotional programs may not be effective or may be perceived negatively, or could require increased expenditures, any of which could adversely affect sales or increase costs.
Although we use marketing and advertising mediums to attract customers to our stores, particularly through television and digital channels, our competitors may spend more or use different approaches, which could provide them with a competitive advantage.
If sales in a certain period are lower than our plans, we may not be able to adjust these operating expenses concurrently, which could adversely affect our operating results. A pandemic, natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center could harm our business.
If sales in a certain period are lower than our plans, we may not be able to adjust these operating expenses concurrently, which could adversely affect our operating results.
We have a concentration of store locations in the states of California, Texas, and Florida; together those states include almost fifty percent of our stores. More than half of our distribution centers and warehouses are located in California.
We may still face temporary store and distribution center closures nationally, regionally, or in specific locations. We have a concentration of store locations in the states of California, Texas, and Florida; together those states include almost 50% of our stores. More than half of our distribution center and warehouse capacity is located in California.
The COVID-19 pandemic and accompanying economic impacts, including supply chain disruptions and inflation, and the developing Russia-Ukraine conflict and accompanying economic impacts, may have prolonged and significant negative effects on consumer confidence, shopping behavior, and spending, which may adversely affect our sales and gross margins. Consumer spending habits for the merchandise we sell are affected by many factors.
Inflation, supply chain disruptions, and other accompanying economic impacts from the Russia-Ukraine conflict, the COVID-19 pandemic, or other external events may continue to have significant negative effects on our costs and on consumer confidence, shopping behavior, and spending, which may adversely affect our sales and profitability.
Our corporate headquarters, Los Angeles buying office, 10 distribution centers/warehouses, and approximately 23% of our stores are located in California.
Although no one store accounts for more than one percent of our sales, our corporate headquarters, Los Angeles buying office, nine distribution centers/warehouses, and approximately 22% of our stores are located in California.
Any such disruptions could negatively impact our financial performance or financial condition. We need to obtain acceptable new store sites with favorable consumer demographics to achieve our planned growth. Successful growth requires us to find appropriate real estate sites in our targeted market areas. We compete with other retailers and businesses for acceptable store locations.
Successful growth requires us to find appropriate real estate sites in our targeted market areas. We compete with other retailers and businesses for acceptable store locations. For the purpose of identifying locations, we rely on consumer demographics.
Government authorities in affected regions have in the past taken actions, sometimes 7 drastic and including mandatory capacity restrictions, reduced operating hours, and closure of retail operations, in an effort to slow down the spread of the disease. We may still face required store closures and distribution center closures, nationally, regionally, or in specific locations.
Government authorities in affected regions have in the past taken actions, sometimes drastic, including mandatory capacity restrictions, reduced operating hours, and closure of retail operations, in an effort to slow down the spread of the disease. The COVID-19 pandemic may potentially adversely affect our ability to adequately staff our distribution centers, stores, and merchant and other support operations.
For the purpose of identifying locations we rely, in part, on consumer demographics. While we believe consumer demographics are helpful indicators of acceptable store locations, we recognize that this information cannot predict future consumer preferences and buying trends with complete accuracy.
While we believe consumer demographics are helpful indicators of acceptable store locations, we recognize that this information cannot predict future consumer preferences and buying trends with complete accuracy. Time frames for negotiations and store development vary from location to location and can be subject to unforeseen delays or unexpected cancellations.
Other factors include levels of unemployment, the size and timing of federal stimulus programs, salaries and wage rates, prevailing economic conditions, increasing inflation, rising interest rates, recession and fears of recession, housing costs, energy and fuel costs, income tax rates and the timing of tax refunds, consumer perceptions of personal well-being and security, availability of consumer credit, consumer debt levels, and the resulting effects on consumers’ disposable income and consumer confidence in future economic conditions.
Factors such as higher fuel and energy costs, rising food prices, rising interest rates, increases in housing costs, the size and timing of government stimulus programs, wage rates, unemployment levels, income tax rates and the timing of tax refunds, availability of consumer credit, consumer debt levels, and the resulting effects on consumers’ disposable income and consumer confidence in future economic conditions all have an impact on consumer spending habits for our merchandise.
We are subject to risks associated with selling and importing merchandise produced in other countries.
We may find it more difficult in new markets to hire, motivate, and retain qualified associates. 11 We are subject to risks associated with selling and importing merchandise produced in other countries.
As a result, adverse or unseasonable weather in any of our markets could lead to disappointing sales and cause us to increase our markdowns, which may negatively affect our sales and margins. In order to achieve our planned gross margins, we must effectively manage our inventories, markdowns, and inventory shortage.
Our advertising and other promotional programs may not be effective or may be perceived negatively, or could require increased expenditures, any of which could adversely affect sales or increase costs. OPERATIONAL RISKS In order to achieve our planned gross margins, we must effectively manage our inventories, markdowns, and inventory shortage.
A severe outbreak or a required closure affecting these facilities would be very disruptive to our ability to supply merchandise to our stores. The COVID-19 pandemic may potentially adversely affect our ability to adequately staff our distribution centers, our stores, and our merchant and other support operations.
A severe outbreak or temporary closure affecting these facilities would be very disruptive to our ability to supply merchandise to our stores.
Currently, the repercussions from the ongoing COVID-19 pandemic present significant risks and uncertainty. There is significant uncertainty over potential changes in consumer behavior and shopping patterns as the pandemic continues and as different regions experience surges.
There is significant uncertainty over potential changes in consumer behavior and shopping patterns as the pandemic continues and as different regions experience surges. Such impacts have and may in the future adversely affect our profitability, cash flows, financial results, and our capital resources.
As the COVID-19 pandemic continues, our customers and associates may be affected by future recommendations and/or mandates from federal, state, and local authorities to stay home, to avoid non-essential social contact and gatherings of people, and to self-quarantine.
The COVID-19 pandemic continues to evolve, with new virus variants, and has an unknown duration and severity. As the COVID-19 pandemic continues, our business and operations may be affected by future recommendations and/or mandates from federal, state, and local authorities.
In addition, if we do not properly allocate our capital resources to maximize returns, our operations, cash flows, and returns to stockholders could be adversely affected. We are subject to impacts from instances of damage to our stores and losses of merchandise accompanying protests or demonstrations, which may result in temporary store closures.
In addition, if we do not properly allocate our capital resources to maximize returns, our operations, cash flows, and returns to stockholders could be adversely affected. 16 ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable. 17
Such impacts have and are expected to adversely affect our profitability, cash flows, financial results, and our capital resources. We are subject to impacts from the macro-economic environment, financial and credit markets, and geopolitical conditions that affect consumer confidence and consumer disposable income.
Risks and uncertainties that apply to both Ross and dd’s DISCOUNTS include, without limitation, the following: MACROECONOMIC AND RETAIL INDUSTRY BUSINESS RISKS We are subject to impacts from the macroeconomic environment, financial and credit markets, and geopolitical conditions that affect consumer confidence and consumer disposable income, and also increase our costs.
Currently, there is also a rapidly developing Russia-Ukraine conflict, which has already escalated into a significant military confrontation, and is resulting in major, potentially prolonged economic sanctions and other responses from the United States and other countries, which present significant risks and uncertainties.
The ongoing Russia-Ukraine conflict is resulting in major, potentially prolonged economic sanctions and other responses from the United States and other countries, which present significant risks and uncertainties. These events may continue to cause various adverse macroeconomic effects, including inflation, increases in fuel and energy costs, rising food prices, and depressed financial markets.
All of our stores are located in the United States and its territories, so we are especially susceptible to changes in the U.S. economy. 8 We need to successfully operate under the health and safety measures implemented in our stores and distribution centers, and across all our operations, to comply with regulatory requirements and with the goal of keeping our customers and associates safe from the spread of the COVID-19 virus without disruptions to our operations.
All of our stores are located in the United States and its territories, so we are especially susceptible to changes in the U.S. economy. 9 Competitive pressures in the apparel and home-related merchandise retailing industry are high.
Removed
Risks and uncertainties that apply to both Ross and dd’s DISCOUNTS include, without limitation, the following: The COVID-19 pandemic continues to adversely affect our sales and our operations, and we expect it to continue to have adverse effects on our business and our financial performance.
Added
Consumer spending levels and shopping behaviors for the merchandise we sell are affected by many external factors. Currently, elevated inflation is affecting consumer demand for our products and increasing our costs.
Removed
While a significant and increasing portion of the population is vaccinated or may have acquired some level of immunity after recovering from illness, it will take more time for those factors to reach levels that permit a return to pre-pandemic levels of social activity.
Added
The effects of the COVID-19 pandemic continue to present significant risks and uncertainty. The widespread pandemic continues to adversely impact global economies and has resulted in significant economic volatility.
Removed
An economic rebound is resulting in rising inflation that may reduce consumer demand for our products, and also increase our costs.
Added
As a result, adverse or unseasonable weather in any of our markets could lead to disappointing sales and cause us to increase our markdowns, which may negatively affect our sales and margins. A pandemic, natural or man-made disaster in California or in another region where we have a concentration of stores, offices, or a distribution center could harm our business.
Removed
These events may cause various adverse macro-economic effects, including increases in fuel and energy prices and depressed financial markets.
Added
We carry fire, flood, wind, and earthquake insurance to help mitigate the risk of financial loss that may result from such events.
Removed
We have implemented a variety of measures in our store locations, distribution centers, and other facilities, with the goal of keeping our associates, customers, and the communities we serve safe from spreading the COVID-19 virus.
Added
Similarly, our responses to events or crises and our position (or perceived lack of position) on environmental, social, and governance (“ESG”) matters, such as sustainability, corporate social responsibility, diversity, equality, and inclusion (“DE&I”), responsible sourcing, and any perceived lack of transparency about those matters could harm our reputation.
Removed
These measures include additional cleaning and sanitation of stores and workspaces, providing associates with personal protective equipment based on CDC or other federal, state, or local health guidelines, and implementing physical distancing practices, in our stores, distribution centers, and in our other operations.
Added
The harm may be immediate, without affording us an opportunity for redress or correction. 14 We are subject to impacts from instances of damage to our stores and losses of merchandise accompanying protests or demonstrations, which may result in temporary store closures. In recent years, there have been demonstrations and protests in cities throughout the United States.
Removed
This is very challenging to do, and there is significant risk, incremental costs, and uncertainty regarding changing requirements. Not only are these measures evolving, but they often require change to established habits and patterns of behavior by large groups of people, who may not fully understand or agree with the requested changes.
Removed
Whatever measures we adopt, there will also be challenges in effecting consistent compliance by our customers and our associates. We are adapting and changing these measures as we learn from experience.

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Item 2. Properties

Properties — owned and leased real estate

7 edited+0 added−5 removed0 unchanged
Biggest changeLocation Approximate Square Footage Own/Lease Distribution/Warehouse Facilities Moreno Valley, California 1,300,000 Own Moreno Valley, California 1 740,000 Lease Moreno Valley, California 1 1,110,000 Lease Perris, California 1,300,000 Own Perris, California 699,000 Own Riverside, California 449,000 Own Sacramento, California 114,000 Lease Shafter, California 1,700,000 Own Shafter, California 1,003,000 Lease Shafter, California 1 350,000 Lease Lakeland, Florida 100,000 Lease Baltimore, Maryland 122,000 Lease Kansas City, Missouri 72,000 Lease Las Vegas, Nevada 102,000 Lease Statesville, North Carolina 1 640,000 Lease Carlisle, Pennsylvania 465,000 Own Carlisle, Pennsylvania 239,000 Lease Carlisle, Pennsylvania 246,000 Lease Fort Mill, South Carolina 1,200,000 Own Fort Mill, South Carolina 428,000 Own Fort Mill, South Carolina 423,000 Own Fort Mill, South Carolina 255,000 Lease Fort Mill, South Carolina 160,000 Lease Rock Hill, South Carolina 1,200,000 Own Rock Hill, South Carolina 431,000 Lease Brookshire, Texas 1,890,000 Own Office Space Dublin, California 414,000 Own Los Angeles, California 120,000 Lease Boston, Massachusetts 5,000 Lease New York City, New York 572,000 Own 1 Operated by a third party.
Biggest changeTotal Approximate Square Footage Location Number of Facilities Owned Leased Distribution/Warehouse Facilities Buckeye, Arizona 1 1 1,700,000 — Moreno Valley, California 3 1,300,000 1,850,000 Perris, California 2 1,999,000 — Riverside, California 1 449,000 — Shafter, California 3 1,700,000 1,353,000 Statesville, North Carolina 1 — 640,000 Carlisle, Pennsylvania 4 465,000 604,000 Fort Mill, South Carolina 5 2,051,000 415,000 Rock Hill, South Carolina 2 1,200,000 431,000 Brookshire, Texas 1 1,890,000 — Office Space Dublin, California 1 414,000 — Los Angeles, California 1 — 120,000 Boston, Massachusetts 1 — 5,000 New York City, New York 1 572,000 — 1 We are currently in the process of completing the construction of this distribution center.
See additional discussion under “Distribution” in Item 1. 19
See additional discussion under “Distribution” in ITEM 1. BUSINESS. 19
At January 29, 2022, the majority of our stores had unexpired original lease terms ranging from three to ten years, with three to four renewal options of five years each. The weighted-average unexpired lease term of our leased stores is approximately six years, or approximately 20 years if renewal options are included.
At January 28, 2023, the majority of our stores had unexpired original lease terms ranging from three to ten years with three to four renewal options of five years each. The weighted-average unexpired current lease term of our leased stores is approximately six years or approximately 19 years if renewal options are included.
State/Territory January 29, 2022 January 30, 2021 Alabama 25 24 Arizona 82 81 Arkansas 10 10 California 443 431 Colorado 39 38 Delaware 4 4 District of Columbia 2 2 Florida 231 225 Georgia 64 63 Guam 2 2 Hawaii 22 22 Idaho 12 12 Illinois 94 89 Indiana 28 26 Iowa 6 6 Kansas 12 12 Kentucky 15 15 Louisiana 21 20 Maryland 27 26 Mississippi 9 9 Missouri 30 27 Montana 6 6 Nebraska 6 5 Nevada 41 40 New Jersey 18 18 New Mexico 18 18 North Carolina 49 49 North Dakota 3 3 Ohio 11 8 Oklahoma 28 28 Oregon 30 30 Pennsylvania 51 51 South Carolina 30 30 South Dakota 2 2 Tennessee 39 37 Texas 277 260 Utah 24 23 Virginia 41 41 Washington 45 43 West Virginia 2 1 Wisconsin 21 19 Wyoming 3 3 Total 1,923 1,859 17 Where possible, we obtain sites in buildings requiring minimal alterations, allowing us to establish stores in new locations in a relatively short period of time and at reasonable costs in a given market.
State/Territory January 28, 2023 January 29, 2022 Alabama 26 25 Arizona 84 82 Arkansas 10 10 California 452 443 Colorado 41 39 Delaware 4 4 District of Columbia 2 2 Florida 239 231 Georgia 66 64 Guam 3 2 Hawaii 21 22 Idaho 12 12 Illinois 101 94 Indiana 31 28 Iowa 7 6 Kansas 14 12 Kentucky 17 15 Louisiana 21 21 Maryland 28 27 Mississippi 11 9 Missouri 31 30 Montana 6 6 Nebraska 7 6 Nevada 41 41 New Jersey 18 18 New Mexico 20 18 North Carolina 52 49 North Dakota 3 3 Ohio 22 11 Oklahoma 29 28 Oregon 32 30 Pennsylvania 53 51 South Carolina 31 30 South Dakota 2 2 Tennessee 40 39 Texas 294 277 Utah 26 24 Virginia 42 41 Washington 45 45 West Virginia 4 2 Wisconsin 24 21 Wyoming 3 3 Total 2,015 1,923 18 Where possible, we obtain sites in buildings requiring minimal alterations, allowing us to establish stores in new locations in a relatively short period of time and at reasonable costs in a given market.
ITEM 2. PROPERTIES At January 29, 2022, we operated a total of 1,923 stores, of which 1,628 were Ross stores in 40 states, the District of Columbia, and Guam, and 295 were dd’s DISCOUNTS stores in 21 states. All stores are leased, with the exception of two locations which we own.
ITEM 2. PROPERTIES At January 28, 2023, we operated a total of 2,015 stores, of which 1,693 were Ross stores in 40 states, the District of Columbia, and Guam, and 322 were dd’s DISCOUNTS stores in 21 states. Nearly all our stores are leased. See additional discussion under “Stores” in ITEM 1. BUSINESS.
See Note E of Notes to Consolidated Financial Statements. See additional discussion under “Stores” in Item 1. 18 The following table summarizes the location and approximate sizes of our distribution/warehouse facilities and office locations as of January 29, 2022. Square footage information for the distribution and warehouse facilities represents total ground floor area of the facility.
The following table summarizes the location and approximate sizes of our distribution/warehouse facilities and office locations as of January 28, 2023. Square footage information for the distribution and warehouse facilities represents total ground floor area of the facility. Square footage information for office space represents total space owned and leased.
In addition, we continue to consider opportunistic real estate acquisitions. 16 The following table summarizes the locations of our stores by state/territory as of January 29, 2022 and January 30, 2021.
The following table summarizes the locations of our stores by state/territory as of January 28, 2023 and January 29, 2022.
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During fiscal 2021, we opened 44 new Ross stores and closed 1 existing store. The average approximate Ross store size is 28,000 square feet. 15 During fiscal 2021, we opened 21 new dd’s DISCOUNTS stores and closed no existing stores. The average approximate dd’s DISCOUNTS store size is 23,000 square feet.
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During fiscal 2021, no one store accounted for more than 1% of our sales. We carry fire, flood, wind, and earthquake insurance to help mitigate the risk of financial loss that may result from such events.
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Our real estate strategy in 2022 is to primarily open stores in states where we currently operate, with the objective to increase our market penetration and leverage our overhead and advertising expenses as a percentage of sales in each market. We also expect to continue our store expansion in newer markets in 2022.
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Important considerations in evaluating a new store location in both newer and more established markets are the availability and quality of potential sites, demographic characteristics, competition, and population density of the local trade area.
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Square footage information for office space represents total space owned and leased. See additional discussion in Management’s Discussion and Analysis.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe proceedings remain in early stages, and are subject to significant uncertainties. We believe that the resolution of our pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows.
Biggest changeThe proceedings are ongoing and remain subject to significant uncertainties. We believe that the resolution of our currently pending class/representative action litigation and other currently pending legal and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 20 PART II
Like many retailers and other businesses, we have filed a lawsuit as plaintiff against the insurance companies with respect to our claims for insurance coverage for business interruption, property damage, and other losses that we have experienced as a result of the COVID-19 pandemic. Our suit was filed in Alameda County, California in December 2020.
Like many retailers and other businesses, we have filed a lawsuit as plaintiff against various insurance companies with respect to our claims for insurance coverage for business interruption, property damage, and other losses that we have experienced as a result of the COVID-19 pandemic. Our suit was filed in Alameda County, California in December 2020.
ITEM 3. LEGAL PROCEEDINGS We have been named in class/representative action lawsuits, primarily in California, alleging violations of wage and hour laws and consumer protection laws. Class/representative action litigation remains pending as of January 29, 2022. We are also party to various other legal and regulatory proceedings arising in the normal course of business.
ITEM 3. LEGAL PROCEEDINGS We have been named in class/representative action lawsuits, primarily in California, alleging violations by us of wage and hour laws and consumer protection laws. Class/representative action litigation remains pending as of January 28, 2023. We are also party to various other legal and regulatory proceedings arising in the normal course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn March 2022, our Board of Directors approved a new two-year program to repurchase up to $1.9 billion of our common stock through fiscal 2023. This new program replaces the previous $1.5 billion stock repurchase program, effective at the end of fiscal 2021 (at which time we had repurchased $650 million under the $1.5 billion program).
Biggest changeThis new program replaced the previous $1.5 billion stock repurchase program, effective at the end of fiscal 2021 (at which time we had repurchased $650 million under the $1.5 billion program). Refer to Note H: Stockholders’ Equity in the Notes to Consolidated Financial Statements for equity compensation plan information.
The information under Item 12 of this Annual Report on Form 10-K under the caption “Equity compensation plan information” is incorporated herein by reference. 22 Stockholder Return Performance Graph The following information in this Item 5 shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
The information under Item 12 of this Annual Report on Form 10-K under the caption “Equity compensation plan information” is incorporated herein by reference. 21 Stockholder Return Performance Graph The following information in this Item 5 shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES General information. Our stock is traded on The NASDAQ Global Select Market ® under the symbol ROST. There were 1,198 stockholders of record as of March 7, 2022 and the closing stock price on that date was $85.12 per share. Cash dividends.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES General information. Our stock is traded on The NASDAQ Global Select Market ® under the symbol ROST. There were 1,217 stockholders of record as of March 6, 2023 and the closing stock price on that date was $112.40 per share. Cash dividends.
On March 1, 2022, our Board of Directors declared a quarterly cash dividend of $0.310 per common share, payable on March 31, 2022. Our Board of Directors declared cash dividends of $0.285 per common share in March, May, August, and November 2021. Our Board of Directors declared a cash dividend of $0.285 per common share in March 2020.
On February 28, 2023, our Board of Directors declared a quarterly cash dividend of $0.335 per common share, payable on March 31, 2023. Our Board of Directors declared cash dividends of $0.310 per common share in March, May, August, and November 2022.
The graph is a historical representation of past performance only and is not necessarily indicative of future performance. 23 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ross Stores, Inc., the S&P 500 Index, and Dow Jones Apparel Retailers Indexed Returns for Fiscal Years Ended Base Period Company/Index 2016 2017 2018 2019 2020 2021 Ross Stores, Inc. 100 122 143 177 176 153 S&P 500 Index 100 126 123 150 176 217 Dow Jones Apparel Retailers 100 114 124 138 147 163 24 ITEM 6.
The graph is a historical representation of past performance only and is not necessarily indicative of future performance. 22 COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Ross Stores, Inc., the S&P 500 Index, and Dow Jones Apparel Retailers Indexed Returns for Fiscal Years Ended Base Period Company/Index 2017 2018 2019 2020 2021 2022 Ross Stores, Inc. 100 117 145 144 125 158 S&P 500 Index 100 98 119 139 172 158 Dow Jones Apparel Retailers 100 109 121 130 143 157 23 ITEM 6.
All remaining shares were repurchased under our publicly announced stock repurchase program. ² In March 2022, our Board of Directors approved a new two-year program to repurchase up to $1.9 billion of our common stock through fiscal 2023 , replacing the $850 million that remained available at the end of fiscal 2021 under the previous $1.5 billion program.
Treasury stock includes shares acquired from employees for tax withholding purposes related to vesting of restricted stock grants. All remaining shares were repurchased under our publicly announced stock repurchase program. In March 2022, our Board of Directors approved a new two-year program to repurchase up to $1.9 billion of our common stock through fiscal 2023.
Information regarding shares of common stock we repurchased during the fourth quarter of fiscal 2021 is as follows: Period Total number of shares (or units) purchased ¹ Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs ($000) November (10/31/2021 - 11/27/2021) 493,824 $115.90 493,824 $1,025,788 December (11/28/2021 - 01/01/2022) 885,525 $110.80 885,525 $927,675 January (01/02/2022 - 01/29/2022) 760,962 $102.40 758,321 $850,003 2 Total 2,140,311 $108.99 2,137,670 $1,900,000 2 ¹ We acquired 2,641 shares of treasury stock during the quarter ended January 29, 2022.
Information regarding shares of common stock we repurchased during the fourth quarter of fiscal 2022 is as follows: Period Total number of shares (or units) purchased ¹ Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs ($000) November (10/30/2022 - 11/26/2022) 583,255 $99.14 583,255 $1,123,480 December (11/27/2022 - 12/31/2022) 861,651 $115.90 855,352 $1,024,350 January (01/01/2023 - 01/28/2023) 650,657 $118.49 627,629 $950,000 Total 2,095,563 $112.04 2,066,236 $950,000 ¹ We acquired 29,327 shares of treasury stock during the quarter ended January 28, 2023.
In May 2020, we temporarily suspended our quarterly dividends, due to the economic uncertainty stemming from the COVID-19 pandemic. Our Board of Directors declared cash dividends of $0.255 per common share in March, May, August, and November 2019. Issuer purchases of equity securities.
Our Board of Directors declared a cash dividend of $0.285 per common share in March, May, August, and November 2021. Issuer purchases of equity securities.
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Treasury stock includes shares acquired from employees for tax withholding purposes related to vesting of restricted stock grants.
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In May 2021, our Board of Directors authorized a program to repurchase up to $1.5 billion of our common stock through fiscal 2022, with plans to buy back $650 million in fiscal 2021 and $850 million in fiscal 2022.
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See Note H of Notes to Consolidated Financial Statements for equity compensation plan information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCost of goods sold in fiscal 2021 increased $2.2 billion co mpared to fiscal 2019, primarily due to a 13% increase in comparable store sales, higher freight and distribution costs primarily due to industry-wide supply chain congestion, and higher wages, and higher sales due to the opening of 118 net new stores between fiscal 2019 and fiscal 2021. 27 Cost of goods sold as a percentage of sales for fiscal 2021 increased approximately 55 b asis points from fiscal 2019, primarily due to a 95 basis point increase in domestic freight costs, mainly driven by worsening industry-wide supply chain congestion, a 30 basis point increase in distribution expenses, mainly driven by higher wages, and a 10 basis point increase in buying costs.
Biggest changeCost of goods sold as a percentage of sales for fiscal 2022 increased approximately 210 b asis points from fiscal 2021 primarily due to a 130 basis point decline in merchandise margin primarily due to higher ocean freight costs and increased markdowns, an 85 basis point increase in distribution expenses primarily due to the timing of packaway inventory carrying costs and the deleveraging effect from the opening of our Brookshire, Texas distribution center, a 30 basis point deleverage in occupancy costs, and a 25 basis point increase in domestic freight costs primarily due to higher fuel costs.
In fiscal 2021, net interest expense decreased by $9.1 million compared to 2020 primarily due to the elimination of interest expense on short-term debt due to the repayment of our $800 million revolving credit facility in October 2020 and higher capitalized interest primarily related to the construction of our Brookshire, Texas distribution center, partially offset by lower interest income due to lower interest rates.
In fiscal 2021, net interest expense decreased by $9.1 million compared to fiscal 2020 primarily due to the elimination of interest expense on short-term debt due to the repayment of our $800 million revolving credit facility in October 2020 and higher capitalized interest primarily related to the construction of our Brookshire, Texas distribution center, partially offset by lower interest income primarily due to lower interest rates.
We facilitate a voluntary supply chain finance program (the “program”) to provide certain suppliers with the opportunity to sell receivables due from us to a participating financial institution at the sole discretion of both the suppliers and the financial institution.
Supply chain finance program. We facilitate a voluntary supply chain finance program (the “program”) to provide certain suppliers with the opportunity to sell receivables due from us to a participating financial institution at the sole discretion of both the suppliers and the financial institution.
A third party administers the program; our responsibility is limited to making payment on the terms originally negotiated with the supplier, regardless of whether the supplier sells its receivable to a financial institution. We do not enter into agreements with the participating financial institution in connection with the program.
A third party administers the program; our responsibility is limited to making payment on the terms originally negotiated with the supplier, regardless of whether the supplier sells its receivable to a financial institution. We do not enter into financial agreements with the participating financial institution in connection with the program.
The increase was primarily due to all our stores remaining open throughout fiscal 2021, compared to the impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period, and to the opening of 64 net new stores between fiscal 2020 and fiscal 2021 , partially offset by approximately $240 million in long-term debt refinancing costs incurred in fiscal 2020 .
The increase was primarily due to all our stores remaining open throughout fiscal 2021 compared to the impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period, and to the opening of 64 net new stores during fiscal 2021, partially offset by approximately $240 million in long-term debt refinancing costs incurred in fiscal 2020 .
The timing of the release of packaway inventory to our stores is principally driven by the product mix and seasonality of the merchandise, and its relation to our store merchandise assortment plans. As such, the aging of packaway varies 30 by merchandise category and seasonality of purchase, but typically packaway remains in storage less than six months.
The timing of the release of packaway inventory to our stores is principally driven by the product mix and seasonality of the merchandise, and its relation to our 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.
Insurance obligations. We use 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. Our self-insurance and deductible liability is determined actuarially, based on claims filed and an estimate of claims incurred but not reported.
We use 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. Our self-insurance and deductible liability is determined actuarially, based on claims filed and an estimate of claims incurred but not reported.
Should a greater amount of claims occur compared to what is estimated or the costs of medical care increase beyond what was anticipated, our recorded reserves may not be sufficient and additional charges could be required. A five percent increase or decrease in our insurance reserves would not have materially impacted our net earnings in fiscal 2021.
Should a greater amount of claims occur compared to what is estimated or the costs of medical care increase beyond what was anticipated, our recorded reserves may not be sufficient and additional charges could be required. A five percent increase or decrease in our insurance reserves would not have materially impacted our net earnings in fiscal 2022 .
Cost of goods sold in fiscal 2021 increased $3.9 billion compared to the prior year, mainly due to higher sales, given that all our stores were open throughout fiscal 2021, compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
Cost of goods sold in fiscal 2021 increased $3.9 billion compared to fiscal 2020 mainly due to higher sales, given that all our stores were open throughout fiscal 2021 , compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
The higher diluted earnings per share in fiscal 2021 were primarily attributable to all our store locations remaining open throughout fiscal 2021, compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
The higher diluted earnings per share in fiscal 2021 was primarily attributable to all our store locations remaining open throughout fiscal 2021, compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
Due to the economic uncertainty stemming from the severe impact of the COVID-19 pandemic, we suspended that stock repurchase program in March 2020, at which time we had repurchased $1.407 billion under the $2.55 billion stock repurchase program.
Due to the economic uncertainty stemming from the severe impact of the COVID-19 pandemic, we suspended that stock repurchase program as of March 2020, at which time we had repurchased $1.407 billion under the $2.55 billion stock repurchase program.
Our longer term strategy is to open additional stor es based on market penetration, local demographic characteristics, competition, expected store profitability, and the ability to leverage overhead expenses. We continually evaluate opportunistic real estate acquisitions and opportunities for potential new store locations. We also evaluate our current store locations and determine store closures based on similar criteria.
Our longer term strategy is to open additional stores based on market penetration, local demographic characteristics, competition, expected store profitability, and the ability to leverage overhead expenses. We continually evaluate opportunistic real estate acquisitions and opportunities for potential new store locations. We also evaluate our current store locations and determine store closures based on similar criteria.
We expect to continue to take advantage of packaway inventory opportunities to maximize our ability to deliver bargains to our customers. Changes in packaway inventory levels impact our operating cash flow. At the end of fiscal 2021, packaway inventory was 40% of total inventory compared to 38% and 46% at the end of fiscal 2020 and 2019, respectively.
We expect to continue to take advantage of packaway inventory opportunities to maximize our ability to deliver bargains to our customers. Changes in packaway inventory levels impact our operating cash flow. At the end of fiscal 2022, packaway inventory was 40% of total inventory compared to 40% and 38% at the end of fiscal 2021 and 2020, respectively.
Operating Activities Net cash provided by operating activities was $1.7 billion in fiscal 2021. This was primarily driven by net earnings excluding non-cash expenses for depreciation, amortization, and stock-based compensation, partially offset by higher merchandise inventory receipts net of accounts payable. Net cash provided by operating activities was $2.2 billion in fiscal 2020.
This was primarily driven by net earnings excluding non-cash expenses for depreciation, amortization, and stock-based compensation, partially offset by higher merchandise inventory receipts net of accounts payable . Net cash provided by operating activities was $2.2 billion in fiscal 2020.
During fiscal 2021 and 2019, our liquidity and capital requirements were provided by available cash and cash flows from operations. During fiscal 2020, our liquidity and capital requirements were provided by available cash and cash flows from operations and our long-term debt financing.
During fiscal 2022 and fiscal 2021, our liquidity and capital requirements were provided by available cash and cash flows from operations. During fiscal 2020, our liquidity and capital requirements were provided by available cash and cash flows from operations and by our long-term debt financing.
This liability is excluded from the schedule above as the timing of payments cannot be reasonably estimated. ² Our New York buying office building is subject to a 99-year ground lease. 3 Minimum lease payments for operating leases signed that have not yet commenced. 4 Purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects, store fixtures and supplies, and information technology services, transportation, and maintenance contracts. 33 Supply chain finance program.
This liability is excluded from the schedule above as the timing of payments cannot be reasonably estimated. 2 Our New York buying office building is subject to a 99-year ground lease. 3 Minimum lease payments for operating leases signed that have not yet commenced. 4 Purchase obligations primarily consist of merchandise inventory purchase orders, commitments related to construction projects, transportation, information technology services, store fixtures and supplies, and maintenance contracts.
Sales for fiscal 2021 also benefited from a combination of government stimulus payments, increasing vaccination rates, diminishing COVID-19 restrictions on operations, pent-up consumer demand, and strong execution of our 26 merchandising strategies. Sales also increased due to the opening of 64 net new stores between fiscal 2020 and fiscal 2021.
Sales for fiscal 2021 also benefited from a combination of government stimulus payments, increasing vaccination rates, diminishing COVID-19 restrictions on operations, pent-up consumer demand, and strong execution of our merchandising strategies. Sales also increased due to the opening of 64 net new stores during fiscal 2021.
We also operate 295 dd’s DISCOUNTS stores in 21 states as of January 29, 2022 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.
We also operate 322 dd’s DISCOUNTS stores in 21 states as of January 28, 2023 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.
Other than the unrecorded contractual obligations noted above, we do not have any material off-balance sheet arrangements as of January 29, 2022. Other Critical Accounting Estimates The preparation of our consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts.
Other than the unrecorded contractual obligations noted above, we do not have any material off-balance sheet arrangements as of January 28, 2023. 31 Other Critical Accounting Estimates The preparation of our consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts.
In February 2022 (the “Effective Date”), we entered into a new, $1.3 billion senior unsecured revolving Credit Agreement (the “2022 Credit Facility”), which replaced our previous $800 million unsecured revolving credit facility (the “Prior Credit Facility”).
Revolving credit facilities. In February 2022, we entered into a new, $1.3 billion senior unsecured revolving credit agreement (the “2022 Credit Facility”), which replaced our previous $800 million unsecured revolving credit facility.
The amounts settled through the program and paid to the participating financial institution were $430.1 million and $2.6 million during fiscal 2021 and 2020, respectively. Standby letters of credit and collateral trust. We use standby letters of credit outside of our revolving credit facility in addition to a funded trust to collateralize some of our insurance obligations.
The amounts settled through the program and paid to the participating financial institution were $777.5 million and $430.1 million during fiscal 2022 and 2021, respectively. Standby letters of credit and collateral trust. We use standby letters of credit outside of our revolving credit facility in addition to a funded trust to collateralize some of our insurance obligations.
The increase in cash used for investing activities in fiscal 2021 compared to fiscal 2020 was primarily due to an increase in our capital expenditures related to the resumption of capital projects deferred during fiscal 2020 .
The increase in cash used for investing activities in fiscal 2021 compared to fiscal 2020 was primarily due to an increase in our capital expenditures as a result of the resumption of capital projects deferred during fiscal 2020.
We cannot be sure that our strategies and our store expansion program will result in a continuation of our historical sales growth, or an increase in net earnings. Cost of goods sold.
We cannot be sure our strategies and store expansion program will result in sales growth or an increase in net earnings. Cost of goods sold.
The de crease in cash flow from operating activities in fiscal 2021 compared to fiscal 2020 was primarily driven by lower Accounts payable leverage (defined as accounts payable divided by merchandise inventory), partially offset by higher net earnings in the current year. Accounts payable leverage was 105% and 150% as of January 29, 2022 and January 30, 2021, respectively.
The decrease in cash flow from operating activities in fiscal 2021 compared to fiscal 2020 was primarily driven by lower accounts payable leverage (defined as accounts payable divided by merchandise inventory) , partially offset by higher net earnings in the year. 28 Accounts payable leverage was 99%, 105%, and 150% as of January 28, 2023, January 29, 2022, and January 30, 2021, respectively.
The decrease in cash provided by financing activities for fiscal 2021, compared to fiscal 2020, was primarily due to the completion of our public debt offerings, net of refinancing costs in fiscal 2020, the resumption of our share repurchases in the second quarter of fiscal 2021, the resumption of cash dividend payments in the first quarter of fiscal 2021, and the repayment of our Series B unsecured Senior Notes .
The decrease in cash flows from financing activities for fiscal 2021 compared to fiscal 2020 29 was primarily due to the completion of our public debt offerings, net of refinancing costs in fiscal 2020, the resumption of our stock repurchases in the second quarter of fiscal 2021, the resumption of cash dividend payments in the first quarter of fiscal 2021, and the repayment of our Series B unsecured Senior Notes.
Our planned capital expenditures for fiscal 2022 are expected to be used for investments in our supply chain to support long-term growth, including construction of our next distribution center, costs for fixtures and leasehold improvements to open planned new Ross and dd’s DISCOUNTS stores, investments in certain information technology systems, and for various other needed expenditures related to our stores, distribution centers, buying, and corporate offices.
Our planned capital expenditures for fiscal 2023 are for investments in our supply chain to support long-term growth, including construction of our next distribution centers, costs for fixtures and leasehold improvements to open new Ross and dd’s DISCOUNTS stores, investments in information technology systems, and for various other expenditures related to our stores, distribution centers, and buying and corporate offices.
We believe the extended closure of our operations in the spring of 2020, and the significant disruptions caused by COVID-19 throughout fiscal 2020, make fiscal 2019 a more useful and relevant basis for comparison to our fiscal 2021 performance in assessing our ongoing results of operations.
We believe the extended closure of our operations in the spring of 2020, and the significant disruptions caused by the COVID-19 pandemic throughout fiscal 2020, made fiscal 2019 a more useful and relevant basis for comparison to our fiscal 2021 performance.
As a result, any forecasts or forward-looking statements speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise these forward-looking statements.
The factors underlying our forecasts and plans are dynamic and subject to change. As a result, any forecasts or forward-looking statements speak only as of the date they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise these forward-looking statements. 32
The amounts owed to a participating financial institution under the program and included in Accounts payable were $272.7 million and $15.6 million at January 29, 2022 and January 30, 2021, respectively. We account for all payments made under the program as a reduction to operating cash flows in Accounts payable within the Consolidated Statements of Cash Flows.
The amounts owed to a participating financial institution under the program and included in Accounts payable were $119.2 million and $272.7 million at January 28, 2023 and January 29, 2022, respectively. We account for all payments made under the program as a reduction to operating cash flows in Accounts payable within the Consolidated Statements of Cash Flows.
Trade credit arises from customary payment terms and trade practices with our vendors. We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade credit, bank credit facility, and other credit sources to meet our capital and liquidity requirements, including lease and interest payment obligations.
We regularly review the adequacy of credit available to us from all sources and expect to be able to maintain adequate trade credit, bank credit facility, and other credit sources to meet our capital and liquidity requirements, including for lease and interest payment obligations.
Net earnings as a percentage of sales for fiscal 2021 were lower than in fiscal 2019, primarily due t o higher cost of goods sold, higher SG&A expenses, and higher interest expense, partially offset by lower taxes on earnings. Earnings per share. Diluted earnings per share in fiscal 2021 was $4.87, compared to $0.24 in the prior year.
Net earnings as a percentage of sales for fiscal 2021 were higher compared to fiscal 2020 primarily due to lower cost of goods sold, lower SG&A expenses, and lower interest expense, partially offset by higher taxes on earnings. Earnings per share. Diluted earnings per share in fiscal 2022 was $4.38 compared to $4.87 in the prior year.
Our effective rate is impacted by changes in tax law and accounting guida nce, location of new stores, level of earnings, tax effects associated with share-based compensation, and the resolution of tax positions with various tax authorities. In fiscal 2020, the CARES Act was signed into law.
Our effective tax rate is impacted by changes in tax law and accounting guida nce, location of new stores, level of earnings, tax effects associated with stock-based compensation, and the resolution of tax positions with various tax authorities. In fiscal 2022, the Inflation Reduction Act (“IRA”) was signed into law.
We repurchased 5.7 million , 1.2 million, and 12.3 million shares of common stock for aggregate purchase prices of approximately $650 million , $132 million, and $1,275 million in fiscal 2021, 2020, and 2019, respectively.
We repurchased 10.3 million, 5.7 million, and 1.2 million shares of common stock for aggregate purchase prices of approximately $950 million, $650 million, and $132 million in fiscal 2022, 2021, and 2020, respectively.
The standby letters of credit are collateralized by restricted cash and the collateral trust consists of restricted cash, cash equivalents, and investments. Trade letters of credit. We had $19.3 million and $16.3 million in trade letters of credit outstanding at January 29, 2022 and January 30, 2021, respectively.
The standby letters of credit are collateralized by restricted cash and the collateral trust consists of restricted cash, cash equivalents, and investments. Trade letters of credit. We had $7.6 million and $19.3 million in trade letters of credit outstanding at January 28, 2023 and January 29, 2022, respectively .
Ross is the largest off-price apparel and home fashion chain in the United States with 1,628 locations in 40 states, the District of Columbia, and Guam, as of January 29, 2022.
Ross is the largest off-price apparel and home fashion chain in the United States, with 1,693 locations in 40 states, the District of Columbia, and Guam, as of January 28, 2023.
Cost of goods also increased due to the opening of 64 net new stores between fiscal 2020 and fiscal 2021.
Cost of goods also increased due to the opening of 64 net new stores during fiscal 2021.
Our capital expenditures include costs to build, expand, and improve distribution centers (primarily related to the construction of our Brookshire, Texas distribution center); open new stores and improve existing stores; and for various other expenditures related to our information technology systems, buying and corporate offices.
Our capital expenditures include costs to build, expand, and improve distribution centers, open new stores and improve existing stores, and for various other expenditures related to our information technology systems and buying and corporate offices.
On March 1, 2022, our Board of Directors declared a quarterly cash dividend of $0.310 per common share, payable on March 31, 2022. Our Board of Directors declared quarterly cash dividends of $0.285 per common share in March, May, August, and November 2021, respectively.
On February 28, 2023 , our Board of Directors declared a quarterly cash dividend of $0.335 per common share, payable on March 31, 2023. Our Board of Directors declared a cash dividend of $0.310 per common share in March, May, August, and November 2022 and a cash dividend of $0.285 per common share in March, May, August, and November 2021.
The CARES Act made several significant changes to business tax provisions including modifications for net operating losses, employee retention credits, and deferral of employer payroll tax payments. The Consolidated Appropriations Act of 2021 (“CAA”) was signed into law during fiscal 2020. The CAA made several changes to business tax provisions including extending certain employment-related tax credits through December 31, 2025.
The CARES Act made several significant changes to business tax provisions including modifications for net operating losses, employee retention credits, and deferral of employer payroll tax payments. The Consolidated Appropriations 27 Act of 2021 (“CAA”) was signed into law during fiscal 2020.
Investing Activities Net cash used in investing activities was $557.8 million , $405.4 million, and $555.0 million in fiscal 2021, 2020, and 2019, respectively, and was related to capital expenditures.
Investing Activities Net cash used in investing activities was $654.1 million, $557.8 million, and $405.4 million in fiscal 2022, 2021, and 2020, respectively, and was related to capital expenditures.
We also use standby letters of credit outside of our revolving credit facility to collateralize some of our trade payable obligations. As of January 29, 2022 and January 30, 2021, we had $3.3 million and $15.3 million, respectively, in standby letters of credit outstanding, and $56.7 million and $56.1 million, respectively, in a collateral trust.
We also use standby letters of credit outside of our revolving credit facility to collateralize some of our trade payable obligations. As of January 28, 2023 and January 29, 2022, we had $2.6 million and $3.3 million, respectively, in standby letters of credit outstanding and $57.8 million and $56.7 million, respectively, in a collateral trust.
Financing Activities Net cash used in financing activities was $1.2 billion in fiscal 2021. Net cash provided by financing activities was $1.7 billion in fiscal 2020. Net cash used in financing activities was $1.7 billion in fiscal 2019.
Financing Activities Net cash used in financing activities was $1.4 billion and $1.2 billion in fiscal 2022 and 2021, respectively . Net cash provided by financing activities was $1.7 billion in fiscal 2020.
The increase in the effective tax rate of 4% for fiscal 2021 compared to fiscal 2020 and the decrease of 3% for fiscal 2020 compared to fiscal 2019 was primarily due to the impact of hiring tax credits on lower pre-tax earnings in fiscal 2020 .
Our effective tax rate for fiscal 2022 and 2021 was approximately 24%. Our effective tax rate for fiscal 2020 was 20%. The increase in effective tax rate of 4% for fiscal 2021 compared to fiscal 2020 was primarily due to the impact of hiring tax credits on lower pre-tax earnings in fiscal 2020.
Our capital expenditures over the last three years are set forth in the table below: ($ millions) 2021 2020 2019 New stores $ 124.9 $ 81.1 $ 137.4 Existing stores 103.3 54.8 125.3 Information systems, corporate, and other 50.3 38.3 91.8 Distribution and transportation 279.3 231.2 201.0 Total capital expenditures $ 557.8 $ 405.4 $ 555.5 Capital expenditures for fiscal 2022 are projected to be approximately $800 million .
Our capital expenditures over the last three years are set forth in the table below: ($ millions) 2022 2021 2020 New stores $ 170.9 $ 124.9 $ 81.1 Existing stores 147.6 103.3 54.8 Information systems, corporate, and other 65.4 50.3 38.3 Distribution and transportation 270.2 279.3 231.2 Total capital expenditures $ 654.1 $ 557.8 $ 405.4 Capital expenditures for fiscal 2023 are projected to be approximately $810 million.
Sales. Sales for fiscal 2021 increased $6.4 billion, or 50.9%, compared to the prior year. This was primarily due to all store locations remaining open throughout fiscal 2021, compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
This was primarily due to all store locations remaining open throughout fiscal 2021, compared to the negative impact from the COVID-19 related closures of all of our stores during a significant portion of the March 2020 to June 2020 period.
Forward-Looking Statements Our Annual Report on Form 10-K for fiscal 2021, and information we provide in our Annual Report to Stockholders, press releases, and other investor communications including those on our corporate website, may contain a number of forward-looking statements regarding, without limitation, the rapidly developing challenges and our plans and responses to the COVID-19 pandemic and related economic and supply chain disruptions, including adjustments to our operations, and planned new store growth, new markets, expected sales, projected earnings levels, capital expenditures, and other matters.
Forward-Looking Statements Our Annual Report on Form 10-K for fiscal 2022, and information we provide in our Annual Report to Stockholders, press releases, and other investor communications including those on our corporate website, may contain a number of forward-looking statements regarding, without limitation, projected sales, costs and earnings, planned new store growth, capital expenditures, the continuing challenges from the COVID-19 pandemic and related economic disruptions and our plans and responses to them, sustainability and carbon reduction targets, and other matters.
Comparable store sales for this purpose represents sales from stores that were open at the end of fiscal 2019, less stores closed in fiscal 2020 and fiscal 2021. 2 Given the temporary store closures resulting from the COVID-19 pandemic, the comparable store sales metric for fiscal 2020 is not meaningful. 3 Amount shown is for fiscal 2019 compared to fiscal 2018 for stores that have been open for more than 14 complete months.
Comparable store sales for this purpose represents sales from stores that were open at the end of fiscal 2019, less stores closed in fiscal 2020 and fiscal 2021. 3 Given the temporary store closures resulting from the COVID-19 pandemic, the comparable store sales metric for fiscal 2020 is not meaningful. Stores.
Stores. Total stores open at the end of fiscal 2021, 2020, and 2019 were 1,923, 1,859, and 1,805, respectively. The number of stores at the end of fiscal 2021, 2020, and 2019 increased by 3%, 3%, and 5% from the respective prior years.
Total stores open at the end of fiscal 2022, 2021, and 2020 were 2,015, 1,923, and 1,859, respectively. The number of stores at the end of fiscal 2022, 2021, and 2020 increased by 5%, 3%, and 3% from the respective prior years. In fiscal 2022, we opened 99 new stores.
Recent Accounting Pronouncements See Note A to the Consolidated Financial Statements - Summary of Significant Accounting Policies (Recently issued accounting standards and Recently adopted accounting standards) for a discussion of recent accounting pronouncements and their impact to our Consolidated Financial Statements.
Recent Accounting Pronouncements Refer to Note A: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for a discussion of recent accounting pronouncements and their impact to our Consolidated Financial Statements.
The decrease in Accounts payable leverage in fiscal 2021 compared to fiscal 2020 was primarily driven by higher merchandise receipts to support higher sales and to replenish our packaway inventory . The increase in cash flow from operating activities in fiscal 2020 compared to fiscal 2019 was primarily driven by higher Accounts payable leverage.
The decrease in accounts payable leverage in fiscal 2022 compared to fiscal 2021 was primarily driven by shorter payment terms. The decrease in accounts payable leverage in fiscal 2021 compared to fiscal 2020 was primarily driven by higher merchandise receipts to support higher sales and to replenish our packaway inventory.
We also 32 acquired 0.5 million , 0.5 million, and 0.6 million shares in fiscal 2021, 2020, and 2019, respectively, of treasury stock from our employee stock equity compensation programs, for aggregate purchase prices of approximately $57.3 million , $45.2 million, and $60.7 million during fiscal 2021, 2020, and 2019, respectively.
During fiscal 2022, 2021, and 2020, we also acquired 0.5 million shares in each year of treasury stock from our employee equity incentive plans, for aggregate purchase prices of approximately $48.9 million, $57.3 million, and $45.2 million, respectively.
Our primary ongoing cash requirements are for merchandise inventory purchases, payroll, operating and variable lease costs, taxes, and for capital expenditures in connection with new and existing stores, and investments in distribution centers, information systems, and buying and corporate offices.
Our primary ongoing cash requirements are for merchandise inventory purchases, payroll, operating and variable lease costs, taxes, capital expenditures in connection with new and existing stores, and investments in distribution centers, information systems, and buying and corporate offices. We also use cash to repurchase stock under active stock repurchase programs, pay dividends, and repay debt as it becomes due.
($ millions) 2021 2020 2019 Cash provided by operating activities $ 1,738.8 $ 2,245.9 $ 2,171.5 Cash used in investing activities (557.8) (405.4) (555.0) Cash (used in) provided by financing activities (1,152.4) 1,701.9 (1,683.2) Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents $ 28.6 $ 3,542.4 $ (66.7) In this report, we compare our cash flows from operating activities to both fiscal 2020 and fiscal 2019.
($ millions) 2022 2021 2020 Cash provided by operating activities $ 1,689.4 $ 1,738.8 $ 2,245.9 Cash used in investing activities (654.1) (557.8) (405.4) Cash (used in) provided by financing activities (1,405.4) (1,152.4) 1,701.9 Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents $ (370.1) $ 28.6 $ 3,542.4 Operating Activities Net cash provided by operating activities was $1.7 billion in fiscal 2022.
The decrease in cash flow from operating activities in fiscal 2021 compared to fiscal 2019 was primarily driven by higher merchandise receipts to support higher sales and to replenish packaway inventory, partially offset by higher incentive bonus accruals and higher net earnings.
The decrease in cash flow from operating activities in fiscal 2022 compared to fiscal 2021 was primarily driven by payment of fiscal 2021 incentive bonuses and lower net earnings, partially offset by lower merchandise inventory receipts net of accounts payable, higher income taxes payable, and higher deferred income taxes.
In March 2022, our Board of Directors approved a new two-year program to repurchase up to $1.9 billion of our common stock through fiscal 2023. This new program replaces the previous $1.5 billion stock repurchase program, effective at the end of fiscal 2021 (at which time we had repurchased $650 million under the previous $1.5 billion program).
In May 2021, our Board of Directors authorized a program to repurchase up to $1.5 billion of our common stock through fiscal 2022. In March 2022, our Board of Directors approved a new two-year program to repurchase up to $1.9 billion of our common stock through fiscal 2023.
Net cash provided by operating activities was $2.2 billion in fiscal 2019, and was primarily driven by net earnings excluding non-cash expenses for depreciation, amortization, and stock-based compensation, and for deferred taxes.
This was primarily driven by net earnings excluding non-cash expenses for depreciation, amortization, and stock-based compensation, and an increase in deferred income taxes, partially offset by merchandise inventory payments and payment of fiscal 2021 incentive bonuses . Net cash provided by operating activities was $1.7 billion in fiscal 2021.
Net earnings. Net earnings as a percentage of sales for fiscal 2021 were higher than in fiscal 2020, primarily due to lower cost of goods sold, lower SG&A expenses, and lower interest expense, partially offset by higher taxes on earnings.
The CAA made several changes to business tax provisions including extending certain employment-related tax credits through December 31, 2025. Net earnings. Net earnings as a percentage of sales for fiscal 2022 were lower than in fiscal 2021 primarily due to higher cost of goods sold, partially offset by lower SG&A expenses and lower interest expense.
Refer to Item 1A in this Annual Report on Form 10-K for a more complete discussion of risk factors for Ross and dd’s DISCOUNTS. The factors underlying our forecasts are dynamic and subject to change.
Our forward-looking statements are subject to risks and uncertainties which could cause our actual results to differ materially from those forward-looking statements and our previous expectations, plans, and projections. Refer to ITEM 1A. RISK FACTORS in this Annual Report on Form 10-K for a more complete discussion of risk factors for Ross and dd’s DISCOUNTS.
As a measure of sensitivity, a five percent change in shortage rates as of January 29, 2022, would not have materially impacted our cost of goods sold in fiscal 2021. Lease accounting.
Historically, our actual physical inventory count results have shown our provision for shortage to be reliable. As a measure of sensitivity, a five percent change in shortage rates as of January 28, 2023 would not have materially impacted our cost of goods sold in fiscal 2022. Insurance obligations.
In addition, there continues to be significant uncertainty surrounding the COVID-19 pandemic, including its unknown duration, the potential for further new virus variants and future resurgences, as well as possible operational restrictions, the ongoing effect of the pandemic on consumer behavior and shopping patterns, and the potential adverse impact on our business. 25 The following table summarizes the financial results for fiscal 2021, 2020, and 2019: 2021 2020 2019 Sales Sales (millions) $ 18,916 $ 12,532 $ 16,039 Sales growth (decline) 50.9% (21.9)% 7.0% Comparable store sales growth 13% 1 n/a 2 3% 3 Costs and expenses (as a percent of sales) Cost of goods sold 72.5% 78.5% 71.9% Selling, general and administrative 15.2% 20.0% 14.7% Interest expense (income), net 0.4% 0.7% (0.1)% Earnings before taxes (as a percent of sales) 11.9% 0.8% 13.5% Net earnings (as a percent of sales) 9.1% 0.7% 10.4% 1 Amount shown is for fiscal 2021 compared to fiscal 2019.
For comparisons of fiscal 2021 to both fiscal 2019 and fiscal 2020, refer to our Annual Report on Form 10-K for fiscal 2021. 24 Results of Operations The following table summarizes the financial results for fiscal 2022, 2021, and 2020: 2022 2021 2020 Sales Sales (millions) $ 18,696 $ 18,916 $ 12,532 Sales (decline) growth (1.2)% 50.9% (21.9)% Comparable store sales (decline) growth (4)% 1 13% 2 n/a 3 Costs and expenses (as a percent of sales) Cost of goods sold 74.6% 72.5% 78.5% Selling, general and administrative 14.8% 15.2% 20.0% Interest expense, net 0.0% 0.4% 0.7% Earnings before taxes (as a percent of sales) 10.6% 11.9% 0.8% Net earnings (as a percent of sales) 8.1% 9.1% 0.7% 1 Comparable stores are stores open for more than 14 complete months. 2 Amount shown is for fiscal 2021 compared to fiscal 2019.
The increase i n our planned capital expenditures for fiscal 2022 compared to fiscal 2021 is primarily driven by the upgrade or remodeling of existing stores, costs for fixtures and leasehold improvements to open planned new Ross and dd’s DISCOUNTS stores, construction of our next distribution center, investments in information technology systems, and for various other needed expenditures related to our stores, distribution centers, buying, and corporate offices.
We expect to fund capital expenditures with available cash. The increase in our planned capital expenditures for fiscal 2023 compared to fiscal 2022 is primarily driven by investments in our next distribution centers, existing store improvements, information technology systems, and various expenditures related to distribution centers, and buying and corporate offices.
The increase in effective tax rate of 1% for fiscal 2021 compared to fiscal 2019 was primarily due to resolution of uncertain tax positions with a state tax authority during fiscal 2019. Our effective tax rate represents the applicable combined federal and state statutory rates reduced by the federal benefit of state taxes deductible on federal returns.
Our effective tax rate represents the applicable combined federal and state statutory rates reduced by the federal benefit of state taxes deductible on federal returns.
As of January 29, 2022 , we had no borrowings or standby letters of credit outstanding under the Prior Credit Facility, the $800 million credit facility remained in place and available, and we were in compliance with the financial covenant. In March 2020, we borrowed $800 million under the Prior Credit Facility.
As of January 28, 2023 , we had no borrowings or standby letters of credit outstanding under the 2022 Credit Facility, the $1.3 billion credit facility remained in place and available, and we were in compliance with the financial covenant. Refer to Note D: Debt in the Notes to Consolidated Financial Statements for additional information. Senior notes.
Our Board of Directors declared quarterly cash dividends of $0.255 per common share in March, May, August, and November 2019, respectively. During fiscal 2021, 2020, and 2019, we paid dividends of $405.1 million , $101.4 million, and $369.8 million, respectively. Short-term trade credit represents a significant source of financing for our merchandise inventory.
During fiscal 2022, 2021, and 2020, we paid dividends of $431.3 million, $405.1 million , and $101.4 million, respectively. Short-term trade credit represents a significant source of financing for our merchandise inventory. Trade credit arises from customary payment terms and trade practices with our vendors.
In fiscal 2021, net interest expense increased by $92.4 million compared to 2019 primarily due to higher interest expense on long-term debt due to the issuance of Senior Notes in April 2020 and October 2020 (net of repurchase of Senior Notes), and lower interest income due to lower interest rates, partially offset by higher capitalized interest primarily related to the construction of our Brookshire, Texas distribution center. 28 The table below shows the components of interest expense and income for fiscal 2021, 2020, and 2019: ($000) 2021 2020 2019 Interest expense on long-term debt $ 88,286 $ 88,544 $ 13,139 Interest expense on short-term debt — 7,863 — Other interest expense 1,351 3,908 968 Capitalized interest (14,476) (12,251) (4,367) Interest income (833) (4,651) (27,846) Interest expense (income), net $ 74,328 $ 83,413 $ (18,106) Taxes on earnings.
The table below shows the components of interest expense, net for fiscal 2022, 2021, and 2020: ($000) 2022 2021 2020 Interest expense on long-term debt $ 84,558 $ 88,286 $ 88,544 Interest expense on short-term debt — — 7,863 Other interest expense 1,668 1,351 3,908 Capitalized interest (5,678) (14,476) (12,251) Interest income (77,706) (833) (4,651) Interest expense, net $ 2,842 $ 74,328 $ 83,413 Taxes on earnings.
Future impact from the ongoing COVID-19 pandemic, and other economic and industry trends that could potentially impact revenue, profitability, operating conditions, and growth are difficult to predict. Our forward-looking statements are subject to risks and uncertainties which could cause our actual results to differ materially from those forward-looking statements and our previous expectations, plans, and projections.
Future impact from inflation, interest rate increases, ongoing military conflicts and economic sanctions, the COVID-19 pandemic, climate change, and other economic, regulatory, and industry trends that could potentially impact revenue, profitability, operating conditions, and growth are difficult to predict.
We believe our share gains will continue to be driven mainly by continued focus on bringing value and convenience to our consumers.
W e are closely monitoring market share trends for the off-price industry and we believe our share gains will continue to grow through continued focus on bringing value and convenience to our consumers.
Other financing activities. In Marc h 2019, our Board of Directors had approved a two-year $2.55 billion stock repurchase program through fiscal 2020.
As of January 28, 2023, we had approximately $2.5 billion of outstanding unsecured Senior Notes. Refer to Note D: Debt in the Notes to Consolidated Financial Statements for additional information. Other financing activities. In March 2019, our Board of Directors approved a two-year $2.55 billion stock repurchase program through fiscal 2020.
We opened 54 net new stores during 2020. The sales from these new stores partially offset the overall sales decline. Sales for fiscal 2021 increased $2.9 billion, or 17.9%, compared to fiscal 2019, due to a 13% increase in sales from comparable stores and the opening of 118 net new stores between fiscal 2019 and fiscal 2021.
The sales decline was partially offset by the opening of 92 net new stores during fiscal 2022. Sales for fiscal 2021 increased $6.4 billion, or 50.9%, compared to fiscal 2020.
In fiscal 2020, net interest expense increased by $101.5 million compared to 2019 primarily due to higher interest expense on long-term debt due to the issuance of Senior Notes in April 2020 and October 2020 (net of repurchase of Senior Notes), lower interest income due to lower interest rates, and higher interest expense on short-term debt due to the draw down on our $800 million revolving credit facility in March 2020 (which was subsequently repaid in October 2020), partially offset by higher capitalized interest primarily related to the construction of our Brookshire, Texas distribution center.
In fiscal 2022, net interest expense decreased by $71.5 million compared to fiscal 2021 primarily due to increased interest income from higher interest rates and lower interest expense on long-term debt due to the repayment of the principal on the $65.0 million notes in fiscal 2021, partially offset by lower capitalized interest.
For fiscal 2021, selling, general and administrative expenses (“SG&A”) increased $371.2 million co mpared to the prior year.
For fiscal 2022, selling, general and administrative expenses (“SG&A”) decreased $115.2 million co mpared to the prior year. The decrease was primarily due to lower incentive compensation expenses and lower COVID-19 costs, partially offset by the opening of 92 net new stores during fiscal 2022. For fiscal 2021, SG&A increased $371.2 million compared to fiscal 2020.
Contractual Obligations The table below presents our significant contractual obligations as of January 29, 2022: Less than 1 year Greater than 1 year Total¹ ($000) Recorded contractual obligations: Senior notes $ — $ 2,474,991 $ 2,474,991 Operating leases 652,365 2,529,515 3,181,880 New York buying office ground lease² 6,274 961,705 967,979 Unrecorded contractual obligations: Real estate obligations 3 11,715 241,469 253,184 Interest payment obligations 80,316 515,450 595,766 Purchase obligations 4 5,026,221 14,991 5,041,212 Total contractual obligations $ 5,776,891 $ 6,738,121 $ 12,515,012 1 We have a $65.4 million liability for unrecognized tax benefits that is included in Other long-term liabilities on our Consolidated Balance Sheets.
We estimate that existing cash and cash equivalent balances, cash flows from operations, bank credit facility, and trade credit are adequate to meet our operating cash needs and to fund our planned capital investments, common stock repurchases, and quarterly dividend payments for at least the next 12 months. 30 Contractual Obligations The table below presents our significant contractual obligations as of January 28, 2023: Less than 1 year Greater than 1 year Total¹ ($000) Recorded contractual obligations: Senior notes $ — $ 2,474,991 $ 2,474,991 Operating leases 684,987 2,612,652 3,297,639 New York buying office ground lease 2 7,552 1,109,430 1,116,982 Unrecorded contractual obligations: Real estate obligations 3 13,167 262,651 275,818 Interest payment obligations 80,316 435,134 515,450 Purchase obligations 4 3,387,014 68,507 3,455,521 Total contractual obligations $ 4,173,036 $ 6,963,365 $ 11,136,401 1 We have a $57.4 million liability for unrecognized tax benefits that is included in Other long-term liabilities on our Consolidated Balance Sheets.
Store Count and Square Footage 2021 2020 2019 Beginning of the period 1,859 1,805 1,717 Opened in the period 65 66 1 98 Closed in the period (1) (12) (10) 2 End of the period 1,923 1,859 1,805 Selling square footage at the end of the period (000) 39,900 38,800 37,900 1 Includes the reopening of a store previously temporarily closed due to a weather event. 2 Includes the temporary closure of a store impacted by a weather event.
Store Count 2022 2021 2020 Ross Beginning of the period 1,628 1,585 1,546 Opened in the period 71 44 50 Closed in the period (6) 1 (1) (11) Total Ross stores end of period 1,693 1,628 1,585 dd’s DISCOUNTS Beginning of the period 295 274 259 Opened in the period 28 21 16 2 Closed in the period (1) — (1) Total dd’s DISCOUNTS stores end of period 322 295 274 Total stores end of period 2,015 1,923 1,859 1 Includes the temporary closure of a store impacted by a weather event. 2 Includes the reopening of a store previously temporarily closed due to a weather event. 25 The total selling square footage as of January 28, 2023, January 29, 2022, and January 30, 2021 was 41.4 million, 39.9 million, and 38.8 million, respectively.
SG&A as a perce ntage of sales for fiscal 2021 increased by approximately 50 basis points compared to fiscal 2019, primarily due to higher incentive compensation costs due to better-than-expected results, net COVID-related operating expenses for supplies, cleaning, and payroll related to additional safety protocols, higher wages, and holiday related pay incentives.
SG&A as a perce ntage of sales for fiscal 2022 decreased by approxima tely 45 basis points compared to fiscal 2021 primarily due to lower incentive compensation expenses and lower COVID-19 costs, partially offset by higher wages and the deleveraging effect of the 4% comparable store sales decline.
Beyond fiscal 2022, we are planning for our pace of new store openings to be greater than our historical annual opening program of approximately 100 stores, based on trends we perceive toward consumers’ increased focus on value and convenience, favorable store performance in both our new and in-fill markets, and the market share opportunities resulting from the significant number of brick-and-mortar retail closures and bankruptcies over the last several years.
We continue to believe that consumers’ increased focus on value and convenience and the significant number of brick-and-mortar retail closures and bankruptcies over the last several years, provides opportunities for us to gain market share.
The 6% increase in diluted earnings per share for fiscal 2021 compared to fiscal 2019, was attributable to a 4% increase in net earnings, and to the reduction in weighted-average diluted shares outstanding of 2% for fiscal 2021, largely due to stock repurchases under our stock repurchase programs. 29 Financial Condition Liquidity and Capital Resources The primary sources of funds for our business activities have been cash flows from operations and short-term trade credit.
Financial Condition Liquidity and Capital Resources The primary sources of funds for our business activities are cash flows from operations and short-term trade credit.
We ended fiscal 2021 with $4.9 billion of unrestricted cash balances, and as of the Effective Date we have $1.3 billion available under our senior unsecured revolving credit facility.
We ended fiscal 2022 with $4.6 billion of unrestricted cash balances, which were held primarily in overnight money market funds invested in U.S. treasury and government instruments across a highly diversified set of banks and other financial institutions. We also have $1.3 billion available under our senior unsecured revolving credit facility.
Our merchandise and operational strategies are designed to take advantage of the trends toward 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 believe our merchandising and operational strategies enable us to deliver the most competitive bargains available to meet our customers’ ongoing demand for name brand fashions for the family and home at compelling discounts every day.
Our sales mix is shown below for fiscal 2021, 2020, and 2019: 2021 1 2020 2019 Home Accents and Bed and Bath 26 % 28 % 25 % Ladies 25 % 23 % 26 % Men’s 14 % 14 % 14 % Accessories, Lingerie, Fine Jewelry, and Cosmetics 14 % 14 % 13 % Shoes 12 % 12 % 13 % Children’s 9 % 9 % 9 % Total 100 % 100 % 100 % We intend to address the competitive retail climate for off-price apparel and home goods by pursuing and refining our existing strategies, and by continuing to strengthen our merchant organization, diversify our merchandise mix, and more fully develop our systems to improve our merchandise offerings.
We intend to address the uncertain and competitive conditions within the retail climate for apparel and home goods by pursuing and refining our existing strategies, continuing to strengthen our merchant organization, diversifying our merchandise mix, and further developing our systems to improve our merchandise offerings.
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, and considering the pace and magnitude of the economic recovery as the COVID-19 pandemic subsides, we are closely monitoring market share trends for the off-price industry.
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. Over the past three years, we have faced a series of unprecedented challenges from the COVID-19 pandemic, subsequent supply chain disruptions and their related cost pressures, and ongoing inflationary headwinds.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeChanges in interest rates may impact interest income recognized in the future, or the fair value of our investment portfolio. 35 A hypothetical 100 basis point increase or decrease in prevailing market interest rates would not have a material negative impact on our consolidated financial position, results of operations, cash flows, or the fair values of our short- and long-term investments as of and for the year ended January 29, 2022.
Biggest changeA hypothetical 100 basis point increase or decrease in prevailing market interest rates would not have a material negative impact on our consolidated financial position, results of operations, cash flows, or the fair values of our short- and long-term investments as of and for the year ended January 28, 2023.
We do not consider the potential losses in future earnings and cash flows from reasonably possible, near-term changes in interest rates to be material. 36
We do not consider the potential losses in future earnings and cash flows from reasonably possible, near-term changes in interest rates to be material. 33
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks, which primarily include changes in interest rates. We do not engage in financial transactions for trading or speculative purposes. We occasionally use forward contracts to hedge against fluctuations in foreign currency prices. We had no outstanding forward contracts as of January 29, 2022.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks, which primarily include changes in interest rates. We do not engage in financial transactions for trading or speculative purposes. We occasionally use forward contracts to hedge against fluctuations in foreign currency prices. We had no outstanding forward contracts as of January 28, 2023.
Interest that is payable on our revolving credit facility is based on variable interest rates and is, therefore, affected by changes in market interest rates. As of January 29, 2022, we had no borrowings outstanding under our revolving credit facility. As of January 29, 2022, we have outstanding seven series of unsecured Senior Notes.
Interest that is payable on our revolving credit facility is based on variable interest rates and is, therefore, affected by changes in market interest rates. As of January 28, 2023, we had no borrowings outstanding under our revolving credit facility. As of January 28, 2023, we have outstanding seven series of unsecured Senior Notes.
Interest that is payable on all series of our Senior Notes is based on fixed interest rates, and is therefore unaffected by changes in market interest rates. We receive interest on our short- and long-term investments.
Interest that is payable on all series of our Senior Notes is based on fixed interest rates, and is therefore unaffected by changes in market interest rates. We receive interest on our short- and long-term investments. Changes in interest rates may impact interest income recognized in the future, or the fair value of our investment portfolio.

Other ROST 10-K year-over-year comparisons