NEWARK, Calif., March 15 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported that pro forma earnings per share for the 13 weeks ended January 29, 2000 increased 10% to $.54 from $.49 per share for the fourth quarter of 1998. Pro forma net earnings for the 13 weeks ended January 29, 2000 totaled $48.2 million, compared to $45.6 million for the 13 weeks ended January 30, 1999. Sales for the fourth quarter of 1999 increased 10% to $695 million with comparable store sales up 2%.

For the 52 weeks ended January 29, 2000, pro forma earnings per share increased 21% to $1.70 from $1.40 per share for the 52 weeks ended January 30, 1999. Pro forma net earnings totaled $155.6 million, compared to $133.8 million for the 52 weeks ended January 30, 1999. Sales for the 1999 fiscal year increased 13% to $2.469 billion, with comparable store sales up a solid 6%.

The fiscal 1999 and fourth quarter results reported above are pro forma for the exclusion of a pre-tax charge of $9.0 million, or $.06 per share, for non-recurring expenses related to litigation.

In commenting on these results, Vice Chairman and Chief Executive Officer Michael Balmuth stated, "We are pleased with the solid gains we achieved in both sales and earnings during fiscal 1999. Operating income for fiscal 1999 continued to benefit from our focus on better buying, strict inventory controls and improved sales productivity, which contributed to a 41 basis point expansion in gross margin. This improvement was partially offset by a 12 basis point increase in general, selling and administrative expenses before non-recurring litigation costs, due primarily to higher benefit costs, credit card fees and incentive plan costs. As a result, proforma operating margin in fiscal 1999 grew by 27 basis points to a record 10.3%, up from 10.1% in 1998."

About the company's financial position, Mr. Balmuth said, "Strong cash flows have enabled the company to internally fund store growth, repurchase stock, increase our dividend payouts and end the year with $79 million in cash and no debt on the balance sheet. Return on average stockholders' equity was maintained at a record 33% in 1999, benefiting from the solid growth in earnings and the repurchase of 5.4 million shares during the year at an aggregate cost of $120 million. In addition, on January 27, 2000, the Board of Directors approved a new two-year $300 million repurchase program for 2000 and 2001 as well as a 15% increase in the quarterly cash dividend payment. These actions reflect our ongoing commitment to enhancing stockholder returns."

In conclusion, he stated, "Looking ahead, we see opportunities to grow the business by effectively executing the strategies that have contributed to our record-breaking financial results to date -- ongoing investments in our merchandise organization and systems, further diversification of our product assortments, strict management of inventories and expenses, and continued square footage growth in existing markets during 2000 with entry into new states targeted for 2001 and beyond."

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 "looking ahead" 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 costs. Other risk factors are detailed in the company's Form 10-K for fiscal 1998.

Ross Stores, Inc. operates a 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 378 stores in operation January 29, 2000, compared to 349 stores at the end of the same period last year.

NOTE TO ANALYSTS, INVESTORS AND MEDIA: Ross Stores, Inc. press releases are available on the Internet via the company's home page at http://www.rossstores.com. A conference call will be held at 11:00 a.m. EST on Wednesday, March 15th, to review these results and can be accessed live on the Internet at www.streetfusion.com. An audio playback of the conference call will be available at www.streetfusion.com through Wednesday, March 22nd.

                                ROSS STORES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                             Three Months Ended       Twelve Months Ended
                          January 29,  January 30,  January 29,  January 30,
    ($000, except            2000          1999        2000          1999
     per share data,
     unaudited)

    Sales                   $694,517     $629,971   $2,468,638    $2,182,361

    Costs and Expenses
      Cost of goods sold
       and occupancy         482,379      439,423    1,702,342     1,513,889
      General, selling and
       administrative        123,120      107,279      472,822       415,284
      Depreciation and
       amortization           10,406        8,749       38,317        33,514
      Interest (income)
       expense                 (489)        (200)        (322)           259
      Provision for
       litigation expense      9,000            0        9,000             0
                             624,416      555,251    2,222,159     1,962,946

    Earnings before
      income taxes            70,101       74,720      246,479       219,415

    Provision for taxes
     on earnings              27,409       29,141       96,373        85,572
    Net earnings             $42,692      $45,579     $150,106      $133,843


    Earnings per share
      Basic                    $0.48        $0.49        $1.66         $1.42
      Diluted                  $0.48        $0.49        $1.64         $1.40


    Weighted average
     shares outstanding
      Basic                   88,616       92,210       90,416        94,071
      Diluted                 89,507       93,584       91,671        95,700

    Stores open end
     of period                   378          349          378           349


                                ROSS STORES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                            January 29,        January 30,
    ($000, unaudited)                          2000               1999

    ASSETS

    Current Assets
      Cash and cash equivalents               $79,329            $80,083
      Accounts receivable                      15,689             11,566
      Merchandise inventory                   500,494            466,460
      Other current assets                     17,682             15,825
      Total Current Assets                   $613,194           $573,934

    Property and equipment, net               273,164            248,712
    Lease rights, deferred income
     taxes and other assets                    61,320             47,660
                                             $947,678           $870,306

LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities

    Accounts payable, accrued
     expenses and other                      $404,754           $384,047
    Income taxes payable                       17,716             19,092
      Total Current Liabilities              $422,470           $403,139

    Other liabilities                          51,777             42,464

    Stockholders' Equity                      473,431            424,703
                                             $947,678           $870,306

SOURCE Ross Stores, Inc.

CONTACT: John G. Call, Senior Vice President & Chief Financial Officer, 510-505-4315, or Katie Loughnot, Director, Investor Relations, 510-505-4509, or katie.loughnot@ros.com, both of Ross Stores, Inc./