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Ross Stores Reports Record First Quarter Results

    NEWARK, Calif., May 19 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST)
today reported record net earnings for the 13 weeks ended May 1, 1999 of
$34.2 million, compared to $27.9 million for the 13 weeks ended May 2, 1998.
Earnings per share for the same period increased 28% to $.73, compared to
$.57 per share in the prior year. Current year first quarter sales totaled
$551 million, up 14% from the $484 million in sales for the quarter ended
May 2, 1998. Comparable store sales for the same period rose 7%.
    In commenting, Michael Balmuth, Vice Chairman and Chief Executive Officer,
stated, "We are pleased with the continued strength of our business during the
first quarter. Solid increases in sales were broadbased throughout most
geographic regions and merchandise categories. We believe these results show
that we remain on track with our value-focused strategies."
    Mr. Balmuth continued, "During the first quarter, our focus on more
opportunistic buying, as well as ongoing strict controls of both inventories
and expenses, enabled Ross to deliver a 75 basis point increase in operating
income to 10.2% of sales, compared to 9.4% in the prior year period. As a
percent of sales, gross margin increased by 68 basis points while general,
selling and administrative expenses declined by 14 basis points.
    "Our expansion program also remained on schedule during the quarter. We
opened six new stores, all in existing markets. These locations are the first
of approximately 30 net new stores we plan to open in 1999. We currently
expect to end the year with about 378 stores in 17 states," said Mr. Balmuth.
    In conclusion, Mr. Balmuth said, "Delivering value to stockholders remains
a top priority at Ross as evidenced by our share repurchase program. During
the first three months of 1999, we repurchased common stock for an aggregate
investment of $36 million, representing about 30% of the total $120 million
repurchase program authorization announced early in the year."
    Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995:  This press release contains certain forward-looking statements which
are subject to risks and uncertainties that could cause the company's actual
results to differ materially from management's current expectations. These
factors include competitive pressures in the apparel industry, changes in the
level of consumer spending on or preferences in apparel or home-related
merchandise, obtaining acceptable store locations, the company's ability to
continue to purchase attractive name brand merchandise at desirable discounts,
unseasonable weather trends, and larger than planned operating costs including
those that could be related to necessary modifications to the company's
computer hardware and software systems to enable them to process information
with dates or date ranges spanning the year 2000 and beyond. The company
presently believes that, with modifications to existing software and
conversions to new software, the year 2000 issue will not pose significant
operational problems for the company's computer systems as so modified and
converted. However, if unforeseen difficulties arise or such modifications and
conversions are not completed timely, or if the company's vendors' or
suppliers' systems are not modified to become year 2000 compliant, then the
year 2000 issue may have a material impact on the operations of the company.
Other risk factors are detailed in the company's Form 10-K for fiscal 1998.
    Ross Stores, Inc. operates a national chain of off-price retail stores
offering first quality, in-season, branded apparel and apparel-related
merchandise for the entire family at prices that average 20% to 60% less than
department and specialty stores, as well as merchandise for the home at
similar savings. The company had 355 stores in operation May 1, 1999, compared
to 331 stores at the end of the same period last year.

                              ROSS STORES, INC.

                                                      Three Months Ended
                                                   May 1,             May 2,
    ($000, except per data share, unaudited)        1999               1998

    Sales                                        $ 550,825          $ 484,276

    Costs and Expenses
      Cost of goods sold and occupancy             379,378            336,816
      General, selling and administrative          106,192             94,057
      Depreciation and amortization                  9,320              7,882
      Interest income                                 (162)              (135)
                                                   494,728            438,620

    Earnings before income taxes                    56,097             45,656

    Provision for taxes on earnings                 21,934             17,806
    Net earnings                                 $  34,163          $  27,850

    Earnings per share
      Basic                                      $    0.74          $    0.58
      Diluted                                    $    0.73          $    0.57

    Weighted average shares outstanding
      Basic                                         45,964             47,849
      Diluted                                       46,740             48,814

    Stores open end of period                          355                331

                              ROSS STORES, INC.

                                                    May 1,            May 2,
    ($000, unaudited)                                1999              1998


    Current Assets
      Cash and cash equivalents                   $  33,307         $  29,725
      Accounts receivable                            15,199            10,513
      Merchandise inventory                         516,107           460,578
      Other current assets                           16,301            15,304
        Total Current Assets                      $ 580,914         $ 516,120

    Property and equipment, net                     249,793           204,253
    Lease rights, deferred income taxes
     and other assets                                50,439            40,934
                                                  $ 881,146         $ 761,307


    Current Liabilities

      Accounts payable, accrued expenses
       and other                                  $ 407,284         $ 336,950
        Total Current Liabilities                 $ 407,284         $ 336,950

      Other liabilities                              45,570            40,085

    Stockholders' Equity                          $ 428,292         $ 384,272
                                                  $ 881,146         $ 761,307

SOURCE  Ross Stores, Inc.