Mr. Balmuth continued, “The merchandise imbalances that resulted from our system problems negatively impacted both sales and operating margin during the third quarter.   Gross margin declined about 350 basis points, mainly due to an increase in distribution costs, higher markdowns, and the deleveraging effect on occupancy and buying expenses from the decline in same store sales.  The lower gross margin was partially offset by an approximate 100 basis point decline in selling, general and administrative costs as a percent of sales, as lower incentive plan costs during the period more than offset the deleveraging effect on store payroll and other expenses.”

           “Strong cash flows continue to provide the resources to fund capital investments in new store growth and infrastructure, as well as the Company’s stock repurchase and dividend programs.  During the first nine months of 2004, we repurchased 5.6 million shares of common stock for an aggregate purchase of $150 million under the two-year $350 million program authorized by our Board of Directors in early 2004.  We ended the quarter with 147 million shares of common stock outstanding,” Mr. Balmuth said. 

          “Looking ahead, our healthy financial position provides us with a solid foundation on which to grow.   We expect to end fiscal 2004 with 649 stores in 26 states and Guam, or unit growth of 14%, which includes the first ten dd’s DISCOUNTS^SM stores that opened during the third quarter.  This exciting new off-price concept delivers exceptional values targeting consumers with household incomes of $30,000 to $40,000, one of the fastest-growing demographics in the country.  With a potential of at least 500 locations, we believe dd’s DISCOUNTS^SM has the ability to significantly enhance our growth prospects over the next five to ten years,” noted Mr. Balmuth.

          The Company will provide additional details concerning its third quarter results and business outlook on a conference call to be held on Tuesday, November 16, 2004 at 12:00 noon Eastern time.  Participants may listen to a real time audio webcast of the conference call by visiting the Company’s website located at www.rossstores.com.    A recorded version of the call will also be available until the end of the month at the website address and via a telephone recording through November 23, 2004 at 402-220-5900, PIN #2342.

          Forward-Looking Statements:  This press release and the recorded comments and transcript on the Company’s website contain forward-looking statements regarding planned new store growth and expected sales and earnings levels and forward-looking statements regarding the time needed to remedy ongoing difficulties with new core merchandising systems and the severity, duration and financial impact of resulting in-store inventory imbalances, all of which are subject to risks and uncertainties that could cause the Company’s actual results to differ materially from management’s current expectations.  The Company is continuing to assess the new information systems, and cannot be certain that all problems have currently been discovered or that their scope is understood.  The words “plan,” “expect,” “anticipate,” “estimate,” “believe,” “forecast,” “project,” “guidance,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Stores and dd’s DISCOUNTS^SM include, without limitation, the Company’s ability to successfully and quickly implement, integrate and correct difficulties in various new supply chain and core merchandising systems, including generation of all necessary information in a timely and cost effective manner, achieving and maintaining targeted levels of productivity and efficiency in its distribution centers, obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences for apparel or home-related merchandise, changes in geopolitical and general economic conditions, unseasonable weather trends, lower than planned gross margin and greater than planned operating costs. Other risk factors are detailed in the Company’s Form 10-K for fiscal 2003.  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.

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