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Ross Stores Reports Third Quarter EPS

NEWARK, Calif., Nov 18, 2003 /PRNewswire-FirstCall via Comtex/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported earnings per share of $.65 for the 13 weeks ended November 1, 2003. These results represented 14% growth on top of a strong 33% gain for the 13 weeks ended November 2, 2002, when the Company reported earnings per share of $.57. Third quarter net earnings in 2003 grew 12% to $50.5 million, from $45.1 million for the 13 weeks ended November 2, 2002. Third quarter sales in 2003 grew 12% to $977 million. These gains were on top of 18% growth in the third quarter of 2002 when sales totaled $870 million. Comparable store sales for the third quarter of 2003 grew 2% on top of a 7% increase in the prior year period.

For the 39 weeks ended November 1, 2003, earnings per share increased 12% to $1.99. These results were on top of a 38% gain for the 39 weeks ended November 2, 2002, when the Company reported earnings per share of $1.78. Net earnings year to date in 2003 grew 8% to $154.4 million, from $142.4 million reported for the first nine months of 2002. Year-to-date sales in 2003 grew 10% to $2.822 billion. These gains were on top of 20% growth for the comparable 2002 year-to-date period when sales totaled $2.567 billion. Same store sales for the first nine months of 2003 were flat on top of a robust 9% gain in the prior year period.

Michael Balmuth, Vice Chairman and Chief Executive Officer, commented, "Our ongoing ability to deliver competitive discounts on a wide array of exciting name brand fashions for the family and the home resulted in respectable sales increases during the third quarter. Business benefited from strong same store sales gains in our Home departments and the back-to-school categories of Juniors, Shoes and Accessories. In addition, continued effective control of both inventories and expenses contributed to stable operating margins and healthy earnings growth for the period."

"During the third quarter, we opened an additional 20 stores, for a total of 66 new locations in 2003. After closing five older stores in January 2004, we expect to end the current year with 568 stores in 25 states," noted Mr. Balmuth.

Mr. Balmuth continued, "In addition, we recently announced the development of dd's DISCOUNTS(SM), a new concept targeted to serve the needs of lower-income households, the fastest growing demographic market in the country. As previously noted, our goal is to open ten initial dd's DISCOUNTS(SM) locations on the west coast during the second half of 2004."

Mr. Balmuth concluded, "During the first nine months of 2003, we repurchased 3.0 million shares of common stock for an aggregate of $125.2 million under the two-year $300 million program authorized by our Board of Directors in early 2002. We ended the quarter with 75.7 million shares of common stock outstanding and approximately $24.8 million remaining under this repurchase authorization, which we expect to complete this year."

The Company will provide additional details concerning its third quarter results and business outlook on a conference call to be held on Tuesday, November 18, 2003 at 11:00 a.m. Eastern Standard 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 November 25, 2003 at 402-220-5900, PIN #2342.

Forward-Looking Statements: This press release contains certain forward-looking statements regarding expected annual unit growth and new store locations, 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," "forecast," "project" and similar expressions identify forward-looking statements. Risk factors include obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in geopolitical and general economic conditions, changes in the level of consumer spending on or preferences in apparel or home-related merchandise and the Company's ability to successfully implement various new supply chain and merchandising systems in a timely and cost effective manner. Other risk factors are detailed in the Company's Form 10-K for fiscal 2002. The factors underlying our forecasts are dynamic and subject to change. As a result, our forecasts speak only as of the date they are given and do not necessarily reflect the Company's outlook at any other point in time. The Company does not undertake to update or revise these forward-looking statements.

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 573 stores in operation as of November 1, 2003, compared to 510 stores at the end of the same period last year. Additional information on the Company is available at

                              ROSS STORES, INC.

                                   Three Months Ended    Nine Months Ended
    ($000, except per share data,   Nov. 1,   Nov. 2,    Nov. 1,     Nov. 2,
     unaudited)                      2003      2002       2003        2002

    Sales                          $976,940  $870,196  $2,821,834  $2,566,738

    Costs and Expenses
      Cost of goods sold, including
       related buying, distribution
       and occupancy costs          730,245   649,694   2,107,699   1,908,128
      Selling, general and
       administrative               163,962   146,398     460,933     424,235
      Interest (income) expense,
       net                             (142)       85        (273)        493
        Total costs and expenses    894,065   796,177   2,568,359   2,332,856

    Earnings before income taxes     82,875    74,019     253,475     233,882

    Provision for taxes on earnings  32,404    28,941      99,109      91,448
    Net earnings                    $50,471   $45,078    $154,366    $142,434

    Earnings per share
      Basic                           $0.67     $0.58       $2.02       $1.82
      Diluted                         $0.65     $0.57       $1.99       $1.78

    Weighted average shares
     outstanding (000)
      Basic                          75,645    77,714      76,323      78,338
      Diluted                        77,238    79,203      77,740      79,974

    Stores open end of period           573       510         573         510

                              ROSS STORES, INC.

                                                   Nov. 1,           Nov. 2,
    ($000, unaudited)                               2003              2002

    Current Assets
      Cash and cash equivalents                   $117,717          $101,490
      Accounts receivable                           26,310            29,238
      Merchandise inventory                        866,864           751,845
      Other current assets                          31,034            46,198
        Total Current Assets                    $1,041,925          $928,771

      Property and equipment, net                  466,797           376,743
      Other long-term assets                        50,850            35,735
                                                $1,559,572        $1,341,249


    Current Liabilities
      Accounts payable, accrued expenses
       and other                                  $698,055          $636,382
      Income taxes payable                          37,785            39,265
        Total Current Liabilities                 $735,840          $675,647

       Long-term debt                               50,000            25,000
       Other liabilities                            57,693            40,556
       Deferred income taxes                        25,021             7,646

    Stockholders' Equity                           691,018           592,400
                                                $1,559,572        $1,341,249

                              ROSS STORES, INC.

                                                        Nine Months Ended
                                                   Nov. 1,           Nov. 2,
     ($000, unaudited)                              2003              2002

     Net earnings                                 $154,366          $142,434
     Adjustments to reconcile net earnings to
      net cash provided by operating activities:
       Depreciation and amortization                54,740            48,879
     Change in assets and liabilities:
       Merchandise inventory                      (150,346)         (128,455)
       Other current assets, net                    (2,091)          (24,186)
       Accounts payable                             55,292            94,100
       Other current liabilities                    59,518            92,062
       Other                                         1,222             6,659
       Net cash provided by operating activities   172,701           231,493

     Additions to property and equipment          (109,261)          (88,012)
       Net cash used in investing activities      (109,261)          (88,012)

     Proceeds from long-term debt                   25,000            25,000
     Issuance of common stock related to
      stock plans                                   17,063            27,198
     Repurchase of common stock                   (125,214)         (123,376)
     Dividends paid                                (13,221)          (11,164)
       Net cash used in financing activities       (96,372)          (82,342)
     Net increase (decrease) in cash and cash
      equivalents                                  (32,932)           61,139
     Cash and cash equivalents:
       Beginning of period                         150,649            40,351
       End of period                              $117,717          $101,490

SOURCE Ross Stores

John G. Call, Senior Vice President, Chief Financial Officer,
+1-510-505-4315, or Katie Loughnot, Vice President, Investor Relations,
+1-510-505-4509, or, both of Ross Stores, Inc.