NEWARK, Calif., March 14 /PRNewswire/ -- Ross Stores, Inc. (Nasdaq: ROST) today reported that earnings per share for the 14 weeks ended February 3, 2001 increased 4% to $.56 from pro forma earnings per share of $.54 for the 13 weeks ended January 29, 2000. Net earnings for the 14 weeks ended February 3, 2001 totaled $45.2 million, compared to pro forma net earnings for the 13 weeks ended January 29, 2000 of $48.2 million. Sales for the fourth quarter of 2000 increased 12% to $779 million with comparable store sales down 1% versus a 2% increase in the prior year.

For the 53 weeks ended February 3, 2001, earnings per share increased 7% to $1.82 compared to pro forma earnings per share of $1.70 for the 52 weeks ended January 29, 2000. Net earnings for 53 weeks ended February 3, 2001 totaled $151.8 million, compared to pro forma net earnings of $155.6 million for the 52 weeks ended January 29, 2000. Sales for the 2000 fiscal year increased 10% to $2.709 billion, with comparable store sales up 1% vs. a 6% increase in the prior year.

The 53rd week in fiscal 2000 added $40 million in revenue and $.07 in earnings per share to fourth quarter and fiscal 2000 results. Full year and fourth quarter fiscal 1999 results are pro forma to reflect the exclusion of a pre-tax charge of $9.0 million, or $.06 per share, for non-recurring expenses related to litigation.

Michael Balmuth, Vice Chairman and Chief Executive Officer, said, "The more difficult external environment, together with the merchandising issues we identified earlier this year, continued to impact both sales and earnings growth in the fourth quarter. In response, we have been taking steps to strengthen our merchandise offerings with more compelling assortments of fresh and exciting name-brand fashions at competitive discounts for the family and the home. We expect these efforts to be fully implemented during the second quarter of 2001.

Mr. Balmuth continued, "Tight inventory controls during the fourth quarter helped to maintain in-store turns and to minimize markdowns. Gross margin declined 32 basis points, mainly due to higher freight costs as a percent of sales. General, selling and administrative costs rose 129 basis points, primarily due to higher store payroll, benefits and distribution expenses and loss of leverage from the decline in same store sales. As a result, operating margin for the fourth quarter was 9.7%, compared to 11.3% on a pro forma basis for the fourth quarter of 1999."

"The company's financial position and cash flows remain strong, enabling us to make significant progress with our stock repurchase program. During fiscal 2000, we repurchased a total of 10.1 million shares for an aggregate purchase price of $169 million and ended the year with 80.5 million shares of common stock outstanding. These shares were repurchased under a two-year $300 million stock repurchase program announced in February 2000. The company expects to complete the remaining buyback authorization under this program in fiscal 2001," said Mr. Balmuth.

Mr. Balmuth continued, "Our expansion program also remains on track. We opened 34 new stores and closed 3 older locations during the year, resulting in 8% square footage growth. During 2001, we plan to accelerate new store expansion with a net addition of 35 to 40 locations, or 9% to 10% unit growth. About 10 to 12 of these stores will open in our new southeast markets of Georgia, North Carolina and South Carolina."

On a more recent note, Mr. Balmuth said, "Last week we reiterated our forecast for same store sales to be flat to down 3% for both March and April. Our plan called for softer sales in the first half of March, with business expected to strengthen as we move closer to Easter. Similar to other retailers, however, we believe that unseasonable weather trends negatively affected our business last week. For the first nine days of March, comparable store sales are below plan at down 6% from the prior year. It is still very early in the quarter, and it would be premature to change our outlook. However, if recent same store sales trends do not improve, we believe that earnings per share for the first quarter would be lower than the current forecasted range of $.44 to $.47. This compares to $.47 in earnings per share for the first quarter ended April 29, 2000."

The company will host a conference call on Wednesday, March 14, 2001 at 11:00 a.m. eastern time to communicate additional details concerning the quarter's results and management's outlook and plans for 2001. Interested parties may access the call by dialing 973-321-1030. In addition, a real time audio webcast of the conference call will be available at www.rossstores.com. An audio playback will be available at 402-220-5900, pin#2342 through March 21, 2001.

Forward-Looking Statements: 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 obtaining acceptable new store locations, competitive pressures in the apparel industry, changes in the level of consumer spending on or preferences in apparel or home-related merchandise, unseasonable weather trends, and greater than planned operating costs. Other risk factors are detailed in the company's Form 10-K for fiscal 1999. 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 these forward-looking statements.

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 409 stores in operation February 3, 2001, compared to 378 stores at the end of the same period last year.

                                ROSS STORES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                                  Three Months Ended   Twelve Months Ended
                               February 3, January 29, February 3, January 29,
    ($000, except per share         2001      2000        2001        2000
     data, unaudited)

    Sales                          $779,107  $694,517  $2,709,039  $2,468,638

    Costs and Expenses
           Cost of goods sold and
            occupancy               543,683   482,379   1,873,284   1,702,342
           General, selling and
            administrative          148,184   123,120     538,726     472,822
           Depreciation and
            amortization             11,848    10,406      44,377      38,317
           Interest expense
            (income)                  1,095      (489)      3,466        (322)
           Provision for
            litigation expense            0     9,000           0       9,000
                                    704,810   624,416   2,459,853   2,222,159

    Earnings before income taxes     74,297    70,101     249,186     246,479

    Provision for taxes on
     earnings                        29,050    27,409      97,432      96,373
    Net earnings                    $45,247   $42,692    $151,754    $150,106


    Earnings per share
           Basic                      $0.56     $0.48       $1.84       $1.66
           Diluted                    $0.56     $0.48       $1.82       $1.64


    Weighted average shares
     outstanding
           Basic                     80,742    88,616      82,619      90,416
           Diluted                   81,429    89,507      83,337      91,671

    Stores open end of period           409       378         409         378


                                ROSS STORES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                 February 3,       January 29,
    ($000, unaudited)                               2001              2000

ASSETS

    Current Assets
           Cash and cash equivalents               $37,154           $79,329
           Accounts receivable                      14,421            15,689
           Merchandise inventory                   559,565           500,494
           Other current assets                     19,929            17,682
                Total Current Assets              $631,069          $613,194

           Property and equipment, net             301,665           273,164
           Lease rights, deferred income
            taxes and other assets                  42,313            61,320
                                                  $975,047          $947,678

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

           Accounts payable, accrued
            expenses and other                    $434,065          $422,470
                Total Current Liabilities         $434,065          $422,470

            Long-term debt                          30,000                 0
            Other liabilities                       43,435            51,777

    Stockholders' Equity                           467,547           473,431
                                                  $975,047          $947,678

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./