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Ross Stores Reports Record First Quarter Results

NEWARK, Calif., May 22, 2002 /PRNewswire-FirstCall via COMTEX/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 13 weeks ended May 4, 2002 increased 37% to a record $.59, compared to $.43 for the 13 weeks ended May 5, 2001. Net earnings in the first quarter of 2002 grew 37% to $47.7 million, compared to $34.7 million in the prior year period. Sales for the first quarter ended May 4, 2002 increased 22% to $820 million, from $674 million for the quarter ended May 5, 2001. Comparable store sales for the same period increased 10% over the prior year.

Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "We are very pleased with our record first quarter results, which continue to benefit from our ability to offer a wide assortment of fresh and exciting national name brand fashions at competitive discounts for the family and the home."

Mr. Balmuth continued, "The combination of a double digit increase in same store sales, healthy new store productivity and 12% unit growth resulted in a 22% increase in total sales. Operating margin expanded approximately 90 basis points during the quarter to 9.6%, leveraging earnings per share growth.

"Our accelerated expansion program remains on schedule, as we opened a record of 20 new stores for the first quarter. These are the first of about 55 net new stores we plan to add in 2002. After closing two older locations, we ended the period with 470 stores in 22 states," noted Mr. Balmuth.

Mr. Balmuth continued, "In early February, we announced that our Board of Directors approved a new two-year $300 million stock repurchase program. During the first three months of 2002, we repurchased 1.1 million shares of common stock for an aggregate investment of $42.1 million under this new authorization, ending the quarter with 78.6 million shares of common stock outstanding."

The company will provide additional details concerning its first quarter results and business outlook on a conference call to be held on Wednesday, May 22, 2002 at 11:00 a.m. Eastern Daylight Time. Participants may listen to a real time audio webcast of the conference call by visiting the company's web site located at A recorded version of the call will also be available until the end of the month at the web site address and via a telephone recording through May 29, 2002 at 402-220-5900, PIN #2342.

Forward-Looking Statements: 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. The words "plan," "expect," "anticipate," "estimate," "believe" and similar expressions identify forward-looking statements. Risk factors include obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, unseasonable weather trends, the ability to successfully open its new distribution centers in a timely and cost effective manner, and greater than planned operating costs. Other risk factors are detailed in the company's Form 10-K for fiscal 2001. The company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes indicate that any projected results expressed or implied therein will not be realized.

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 470 stores in operation as of May 4, 2002, compared to 419 stores at the end of the same period last year.

                                ROSS STORES, INC.

                                                   May 4,            May 5,
    ($000, unaudited)                               2002              2001


    Current Assets
           Cash and cash equivalents               $72,630           $38,282
           Accounts receivable                      24,464            20,658
           Merchandise inventory                   674,033           607,252
           Other current assets                     26,940            21,992
                Total Current Assets              $798,067          $688,184

           Property and equipment, net             344,623           306,332
           Lease rights, deferred income
            taxes and other assets                  38,984            40,110
                                                $1,181,674        $1,034,626


    Current Liabilities

           Accounts payable, accrued
            expenses and other                    $535,966          $447,941
           Income taxes payable                     30,568            21,577
                Total Current Liabilities         $566,534          $469,518

            Long-term debt                               0            50,000
            Other liabilities                       43,675            41,371
            Deferred income taxes                    7,646                 0

    Stockholders' Equity                           563,819           473,737
                                                $1,181,674        $1,034,626

                                ROSS STORES, INC.

                                                     Three Months Ended
                                                   May 4,            May 5,
    ($000, except per share data,
     unaudited)                                     2002              2001

    Sales                                         $819,611          $674,359

    Costs and Expenses
           Cost of goods sold and
            occupancy                              556,030           464,529
           General, selling and
            administrative                         172,221           139,237
           Depreciation and amortization            12,861            11,999
           Interest expense                            224             1,655
                                                   741,336           617,420

    Earnings before income taxes                    78,275            56,939

    Provision for taxes on earnings                 30,606            22,263
    Net earnings                                   $47,669           $34,676

    Earnings per share
           Basic                                     $0.60             $0.43
           Diluted                                   $0.59             $0.43

    Weighted average shares outstanding
           Basic                                    78,865            80,276
           Diluted                                  80,585            81,051

    Stores open end of period                          470               419


SOURCE Ross Stores, Inc.

John G. Call,
Senior Vice President,
Chief Financial Officer,
Katie Loughnot,
Vice President, Investor Relations,
both of Ross Stores, Inc.

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