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Ross Stores Inc. Message Board

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  • robshannonjr robshannonjr Aug 28, 2012 6:30 PM Flag

    Stores gone downhill

    That was not possible, but I am on time to short this stock. Bought Jan 13 ROST $70 puts.

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    • If you had any conviction you would be selling the calls naked. No balls? Kiss your put money sayonara!

    • I am a vendor to Ross. About two years ago they decided to change their business model and make a lot more money, they did this is two ways:

      1.)I used to ship them FOB: which meant they picked up the goods overseas and paid the duty and then put the goods in the stores. Now they have us ship them EX Dock: US and give them terms. Meaning that instead of their paying the duty and taking delivery of the goods at once. We now pay the duty and they don't take the goods until it is the US. This results, their not having to lay out the funds for the duty and in many cases selling the goods before they pay for it.

      2.)The second thing they have done is putting less inventory in the store and closer to the time they need it. So they are now running the stores with a lot less inventory and turning it faster. For example, any seasonal goods, let's take Christmas, used to be brought into the stores beginning Sept. and they would do maybe 20% of the Christmas sales in Sept and Oct and the rest later. Now they don't bring the goods in until Oct. giving up the early 20% sales and all that inventory and capture the 80% w/o having to lay out all the money earlier.

      They have figured out ways to make more money, they want people to buy when they are in the stores. I would not sell this stock for the next 5 years, it will triple in that time.

 
ROST
54.42+0.35(+0.65%)Jun 24 4:00 PMEDT