“General, selling and administrative expenses as a percent of sales rose about 45 basis points during the third quarter, as leverage from the 9% increase in same store sales was more than offset by higher incentive plan costs compared to the prior year.  During 2004, the incentive plan expense accruals from the first half of that year were reversed in the third quarter when we determined that no bonuses would be paid under the plan,” said Mr. Balmuth.

          Looking ahead to the fourth quarter, Mr. Balmuth said, “We are encouraged by our recent sales trends and remain cautiously optimistic about our prospects heading into the important holiday season.  For the 13 weeks ending January 28, 2006, we continue to project same store sales gains of 2% to 3% and are now forecasting earnings per share to be in the range of $.44 to $.47, compared to $.35, as restated, in the prior year period.”

New $400 Million Stock Repurchase Authorization and 20% Increase in Dividend

          Mr. Balmuth continued, “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.  Reflecting this strength, we are pleased to report that our Board of Directors has authorized a new two-year $400 million share repurchase program and a 20% increase in the quarterly cash dividend.  The new stock buyback program represents over 10% of the Company’s total market value at current price levels.  The new quarterly cash dividend of $.06 per common share is payable on or about January 3, 2006 to stockholders of record as of December 7, 2005.”

          “During the first nine months of 2005, we also repurchased 4.9 million shares of common stock for an aggregate purchase price of $133 million.   In addition to today’s newly announced share repurchase program, approximately $42 million remains available for future repurchases under the prior two-year, $350 million stock repurchase program authorized in early 2004, which we expect to complete this year.  We ended the third quarter with 144.7 million shares of common stock outstanding,” Mr. Balmuth said.

Fiscal 2006 Outlook

          In commenting on the Company’s outlook for 2006, Mr. Balmuth continued, “We are now planning total unit growth of about 8% in fiscal 2006, consisting of approximately 55 net new Ross locations and about five additional dd’s DISCOUNTS^® stores, followed by forecasted unit growth of approximately 9% for fiscal 2007.  As we concentrate on improving our ability to meet customer needs at a more local level, we plan to focus this expansion in the regions we already serve.  Our objective is to improve store sales productivity, especially in our newer markets, before we further pressure profit margins by entering any major new regions.  We believe this more focused growth strategy will enhance our ability to realize improved store sales productivity and profitability across all markets, enabling us to balance growth with improvement in operating margins and overall returns.”

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