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Ross Stores Reports Record Second Quarter Results

    NEWARK, Calif., Aug. 18 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST)
today reported that net earnings for the 13 weeks ended July 31, 1999 grew to
a record $38.6 million, compared to net earnings of $32.4 million for the
13 weeks ended August 1, 1998.   Earnings per share increased 24% to $.83 for
the quarter, compared to earnings per share of $.67 for the same period in
1998.  Current year second quarter sales totaled $615 million, up 15% from the
$537 million in sales for the quarter ended August 1, 1998.  Comparable store
sales for the 13 weeks ended July 31, 1999 rose 7% over the prior year.
    For the 26 weeks ended July 31, 1999, net earnings grew to a record
$72.8 million, compared to net earnings of $60.3 million, for the 26 weeks
ended August 1, 1998.  Earnings per share for the first six months increased
26% to $1.56, compared to earnings per share of $1.24 for the first half of
1998.  Sales for the 26 weeks ended July 31, 1999 increased 14% to
$1.165 billion, from $1.021 billion in the prior year.  Same store sales for
the first six months of 1999 increased 7% over the same period in 1998.
    In commenting, Michael Balmuth, Vice Chairman and Chief Executive Officer,
stated, "We are pleased with the record sales and earnings achieved in the
second quarter and first six months of 1999.  This performance indicates that
our value-driven strategies remain on track.  During the second quarter, our
focus on more opportunistic buying, along with ongoing strict controls of both
inventories and expenses, contributed to a 41 basis point increase over the
prior year period in operating margin, which grew to 10.4% of sales.  As a
percent of sales, gross margin increased by 27 basis points while general,
selling and administrative expenses declined by 10 basis points.
    "We also remained on track during the period with our expansion plans,
opening nine new stores during the quarter, all in existing markets.  Another
19 stores are expected to open in the second half, for a total of 34 new
locations in 1999.  We expect to end the year with 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 six months, we have repurchased common stock for an aggregate
investment of $72 million, representing about 60% 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.  The
words "expect," "anticipate," "estimate," "believe" and similar expressions
identify forward-looking statements.  Risk 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 363 stores at July 31, 1999, compared to
339 stores at the end of the same period last year.

                              ROSS STORES, INC.
                   ($000, except per data share. unaudited)

                                Three Months Ended       Six Months Ended
                               July 31,    August 1,   July 31,    August 1,
                                 1999        1998        1999        1998

    Sales                     $614,576     $536,975  $1,165,401  $1,021,251
    Costs and Expenses
     Cost of goods sold
      and occupancy            424,143      371,996     803,521     708,812
     General, selling and
      administrative           117,677      103,355     223,869     197,412
     Depreciation and
      amortization               9,132        8,230      18,452      16,112
     Interest expense              182          265          20         130
                               551,134      483,846   1,045,862     922,466
    Earnings before income
     taxes                      63,442       53,129     119,539      98,785
    Provision for taxes
     on earnings                24,806       20,720      46,740      38,526
    Net earnings               $38,636      $32,409     $72,799     $60,259
    Earnings per share
      Basic                      $0.85        $0.68       $1.59       $1.26
      Diluted                    $0.83        $0.67       $1.56       $1.24
    Weighted average shares
      Basic                     45,566       47,455      45,765      47,652
      Diluted                   46,367       48,358      46,551      48,582
    Stores open end of period      363          339         363         339

                              ROSS STORES, INC.
                              ($000, unaudited)

                                                   July 31,       August 1,
                                                     1999           1998

    Current Assets
     Cash and cash equivalents                       $30,119        $31,972
     Accounts receivable                              14,824         11,722
     Merchandise inventory                           522,904        468,952
     Other current assets                             16,177         15,440
       Total Current Assets                         $584,024       $528,086
    Property and equipment, net                      255,019        234,318
    Lease rights, deferred income taxes
     and other assets                                 51,772         40,318
                                                    $890,815       $802,722

    Current Liabilities
     Accounts payable, accrued
      expenses and other                            $385,370       $352,896
     Income taxes payable                             21,803         12,620
       Total Current Liabilities                    $407,173       $365,516
     Long-term debt                                        0         10,000
     Other liabilities                                47,703         41,119
    Stockholders' Equity                             435,939        386,087
                                                    $890,815       $802,722

SOURCE  Ross Stores, Inc.