UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended AUGUST 3, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-14678
ROSS STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction 94-1390387
of incorporation or organization) (I.R.S. Employer Identification No.)
8333 Central Avenue, Newark, California 94560-3433
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (510) 505-4400
Former name, former address and N/A
former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No __
The number of shares of Common Stock, with $.01 par value, outstanding on
August 31, 1996 was 25,080,634.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROSS STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000) August 3, February 3, July 29,
ASSETS 1996 1996 1995
(Unaudited) (Note A) (Unaudited)
Current Assets
Cash and cash equivalents $ 35,080 $ 23,426 $ 25,493
Accounts receivable 15,071 9,901 8,206
Merchandise inventory 357,778 295,965 303,659
Prepaid expenses and other 12,489 13,474 11,048
________ ________ ________
Total Current Assets 420,418 342,766 348,406
Property And Equipment
Land and buildings 24,115 24,102 24,101
Fixtures and equipment 155,084 156,811 148,584
Leasehold improvements 123,672 123,829 115,184
Construction-in-progress 20,035 16,808 9,067
________ ________ ________
322,906 321,550 296,936
Less accumulated depreciation
and amortization 144,685 140,174 128,208
________ ________ ________
178,221 181,376 168,728
Other assets 16,555 17,010 17,962
________ ________ ________
$615,194 $541,152 $535,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $175,821 $137,653 $ 128,925
Accrued expenses and other 45,840 42,944 40,574
Accrued payroll and benefits 33,574 30,064 22,916
Income taxes payable 16,427 10,555 7,180
________ ________ ________
Total Current Liabilities 271,662 221,216 199,595
Long-term debt 9,665 9,806 45,940
Deferred income taxes and other 18,773 18,614 21,426
liabilities
Stockholders' Equity
Capital stock 252 246 246
Additional paid-in capital 153,745 133,409 127,026
Retained earnings 161,097 157,861 140,863
________ ________ ________
315,094 291,516 268,135
________ ________ ________
$615,194 $541,152 $535,096
________
See notes to condensed consolidated financial statements.
3
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Six Months Ended
($000 except per share data, unaudited) August 3, July 29, August 3, July 29,
1996 1995 1996 1995
Sales $ 405,656 $ 351,202 $ 776,604 $648,637
Costs and Expenses
Cost of goods sold and occupancy 285,618 254,230 549,675 472,849
General, selling and administrative 81,762 72,036 157,982 136,695
Depreciation and amortization 7,164 6,758 14,425 13,443
Interest 31 951 215 1,979
________ _________ ________ _________
$374,575 $333,975 $722,297 $624,966
Earnings before taxes 31,081 17,227 54,307 23,671
Provision for taxes on earnings 12,432 6,891 21,723 9,468
_______ _________ ________ _________
Net earnings $18,649 $ 10,336 $ 32,584 $ 14,203
Net earnings per share:
Primary $ .72 $ .42 $ 1.26 $ .58
Fully diluted $ .72 $ .42 $ 1.26 $ .57
Weighted average shares outstanding:
Primary 25,929 24,686 25,806 24,670
Fully diluted 25,930 24,726 25,815 24,709
Stores open at end of period 299 282
See notes to condensed consolidated financial statements.
4
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
($000, unaudited) August 3, July 29,
1996 1995
Cash Flows From Operating Activities
Net earnings $ 32,584 $ 14,203
Adjustments to reconcile net earnings to net cash used
in operating activities:
Depreciation and amortization of property and equipment 14,425 13,443
Other amortization 3,100 2,489
Change in current assets and current liabilities:
Merchandise inventory (61,814) (28,477)
Other current assets - net (4,185) (1,738)
Accounts payable 39,904 20,806
Other current liabilities - net 16,414 3,000
Other 1,090 1,760
________ ________
Net cash provided by operating activities 41,518 25,486
Cash Flows From Investing Activities
Additions to property and equipment (16,335) (19,341)
_________ _________
Net cash used in investing activities (16,335) (19,341)
Cash Flows From Financing Activities
(Repayment) of long-term debt (170) (128)
Issuance of common stock related to stock plan 24,413 220
Repurchase of common stock (34,252) (1,385)
Dividends paid (3,520) (2,940)
________ _______
Net cash (used in) financing activities (13,529) (4,233)
________ _______
Net Increase In Cash 11,654 1,912
Cash
Beginning of year 23,426 23,581
________ ________
End of quarter $ 35,080 $ 25,493
See notes to condensed consolidated financial statements.
5
ROSS STORES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended August 3, 1996 and July 29, 1995
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared from the records of the company
without audit and, in the opinion of management, include all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position at August 3,
1996 and July 29, 1995; the interim results of operations for the
three and six months ended August 3, 1996 and July 29, 1995; and
changes in cash flows for the six months then ended. The balance
sheet at February 3, 1996, presented herein, has been derived from
the audited financial statements of the company for the fiscal year
then ended.
Accounting policies followed by the company are described in Note A
to the audited consolidated financial statements for the fiscal
year ended February 3, 1996. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted for purposes of the condensed consolidated
interim financial statements. The condensed consolidated financial
statements should be read in conjunction with the audited
consolidated financial statements, including notes thereto, for the
year ended February 3, 1996.
The results of operations for the three and six month periods
herein presented are not necessarily indicative of the results to
be expected for the full year.
The condensed consolidated financial statements at August 3, 1996
and July 29, 1995, and for the three and six months then ended have
been reviewed, prior to filing, by the registrant's independent
accountants whose report covering their review of the financial
statements is included in this report on page 6.
NOTE B - STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURES
Total cash paid for interest and income taxes is as follows:
Six Months Ended
($000, unaudited) August 3, 1996 July 29, 1995
Interest $ 570 $ 2,141
Income Taxes $ 15,851 $ 7,027
6
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders of Ross Stores, Inc.
Newark, California
We have reviewed the accompanying condensed consolidated balance
sheets of Ross Stores, Inc. (the "Company") as of August 3, 1996
and July 29, 1996, and the related condensed consolidated
statements of earnings for the three-month and six-month periods
then ended and the related condensed consolidated statements of
cash flows for the six-month periods then ended. These condensed
consolidated financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to such condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Ross Stores,
Inc. as of February 3, 1996, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated
March 15, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information
set forth in the accompanying condensed consolidated balance sheet
as of February 3, 1996 is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has
been derived.
Deloitte & Touche LLP
San Francisco, CA
August 23, 1996
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
STORES
On July 31, 1996, the company announced that it entered into an
agreement with the TJX Companies ("TJX") to acquire the leasehold
rights to all six of TJX's off-price stores in the state of Hawaii.
Five stores are former Marshalls locations, all of which will be
converted to the Ross concept and are scheduled to re-open in
November 1996. The sixth location, a TJ Maxx store, will be
closed. With its two existing Hawaii locations, Ross will now
operate a total of seven stores in the state, providing economies
of scale in distribution, supervision and advertising expenses.
With these additional stores, the company plans to open a total of
21 stores this year. After closing four older locations in January
1997, the company expects to operate 309 stores at the end of
fiscal 1996.
RESULTS OF OPERATIONS
PERCENTAGE OF SALES
Three Months Ended Six Months Ended
August 3, July 29, August 3, July 29,
1996 1995 1996 1995
SALES
Sales ($000) $405,656 $351,202 $776,604 $648,637
Sales growth 15.5% 12.5% 19.7% 12.5%
Comparable store sales growth 9% 1% 11% 1%
COSTS AND EXPENSES
Cost of goods sold and occupancy 70.4% 72.4% 70.8% 72.9%
General, selling and administrative 20.2% 20.5% 20.3% 21.1%
Depreciation and amortization 1.8% 1.9% 1.9% 2.1%
Interest 0% .3% 0% .3%
NET EARNINGS 4.6% 2.9% 4.2% 2.2%
Sales
The results of operations for the three and six months ended August
3, 1996, over the same period last year, reflect an increase in the
level of sales which was due to the increase in comparable store
sales as well as a greater number of open stores during the current
period.
Costs and Expenses
The decline from the prior year in the cost of goods sold and
occupancy as a percentage of sales for the three and six month
periods was primarily due to (i) an increase in the initial mark-up
from purchasing more opportunistically; (ii) lower markdowns as a
percentage of sales; and (iii) leverage on occupancy costs.
8
General, selling and administrative expenses as a percentage of
sales also declined from the comparable quarter in the prior year.
This improvement was due to the company's continued focus on strict
expense controls and the leverage realized from the strong
comparable store sales gain of 9% which was partially offset by
higher accruals for the company's incentive plan and increased
distribution costs.
Net earnings for the three months ended August 3, 1996, totaled
$18.6 million, or $.72 per share, compared to net earnings of $10.3
million, or $.42 per share, for the three months ended
July 29, 1995.
In August of this year, Congress passed the Minimum Wage Act of
1996 which raised the federal minimum wages from $4.25 per hour to
$4.75 per hour. This increase becomes effective October 1, 1996
and is not expected to have a material impact on the company's labor costs.
Taxes on Earnings
The company's effective tax rate for the second quarter of 1996 and
1995 was 40%. The rate for both periods reflects the applicable
statutory tax rates.
LIQUIDITY AND CAPITAL RESOURCES
The primary uses of cash, other than for operating expenses, during
the first six months of fiscal 1996 were for (i) purchase of
inventory, (ii) repurchase of the company's common stock, and (iii)
capital expenditures for new stores, improvements to existing
locations and improvements in operating systems.
Total consolidated inventories were up 18% at the end of the second
quarter from last year due mainly to an increase in the number of
new stores planned in 1996 and higher levels of opportunistic
purchases of seasonal packaway merchandise. The increased
purchases of packaway inventories at the end of the quarter also
contributed to the higher level of accounts payable at the end of
the period.
The increase in the accounts receivable reflects an increase in
deferred compensation and an increase in credit card sales which
were in line with the higher volume in business relative to last
year. The decline in interest expense reflects the decline in
borrowings which resulted primarily from higher earnings levels,
the higher levels of accounts payable, lower capital and income
from stock option exercises.
On August 30, 1996, the company paid in full the outstanding
balance on the mortgage loan for the company's East Coast
distribution center in Carlisle, Pennsylvania. The outstanding
principal and accrued interest paid was $9.7 million.
The company believes it can fund its capital needs for the
remainder of the fiscal year and complete the current stock
repurchase program through internally generated cash, trade credit,
established bank lines and lease financing.
9
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual meeting of Stockholders held on May 30, 1996 (the
"1996 Annual Meeting"), the stockholders of the company voted on
and approved the following proposals:
Proposal 1 to reelect three Class I Directors for a three year term.
Proposal 2 to approve the amendment to the 1988 Restricted Stock
Plan to increase the share reserve by 1,000,000 shares.
Proposal 3 to approve the amendment to the 1991 Outside Directors
Stock Option Plan to increase the share reserve by 50,000 shares.
Proposal 4 to approval the company's Incentive Compensation Plan.
Proposal 5 to ratify the appointment of Deloitte & Touche LLP as
the company's certified public accountants for the fiscal year
ending February 1, 1997.
INFORMATION ON THE BOARD OF DIRECTORS
Stuart G. Moldaw, Donald H. Seiler and George P. Orban were the
nominees reelected at the 1996 Annual Meeting as the company's
Class 1 Directors whose terms expire in 1999. The following are
the company's directors who were not up for reelection and whose
terms of office continues after the 1996 Annual Meeting: incumbent
Class II Directors whose terms expire in 1997: Donna L. Weaver,
Maynard Jenkins and Michael Balmuth; and incumbent Class III
Directors whose terms expire in 1998: Norman A. Ferber, Philip
Schlein and Melvin A. Wilmore.
1996 ANNUAL MEETING ELECTION RESULTS
Proposal 1
BROKER
ELECTION OF DIRECTORS IN FAVOR WITHHELD NON-VOTES
Stuart G. Moldaw 22,163,223 663,501 N/A
Donald H. Seiler 22,275,101 551,623 N/A
George P. Orban 22,288,363 538,361 N/A
Proposals 2,3,4, and 5
BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTES
Amendment to the 1988 12,983,005 9,499,294 319,775 24,650
Restricted Stock Plan
Amendment to 1991 Outside 15,065,990 7,421,193 313,391 26,150
Directors Stock Option Plan
Amendment to Incentive 22,281,219 193,547 325,808 26,150
Compensation Plan
Appointment of Deloitte & 22,802,804 10,788 13,132 N/A
Touch LLP
10
ITEM 5. OTHER INFORMATION
Effective September 1, 1996, Norman A. Ferber stepped down as Chief
Executive Officer of the company and became a consultant to the
company. Michael Balmuth, the company's former Executive Vice
President, Merchandising, succeeded Mr. Ferber as Chief Executive
Officer. Melvin A. Wilmore remains as President and Chief
Operating Officer. Mr. Ferber continues as Chairman of the Board.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Incorporated herein by reference to the list of Exhibits
contained in the Exhibit Index which begins on page 10 of this
Report.
(b) Reports on Form 8-K
None.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed by
the undersigned thereunto duly authorized.
ROSS STORES, INC.
Registrant
Date: September 13, 1996 /s/John M. Vuko
John M. Vuko,
Senior Vice President, Controller and
Principal Accounting Officer
12
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3.1 Certificate of Incorporation, as amended, incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form 8-B
(the "Form 8-B") filed September 1, 1989 by Ross Stores, Inc., a
Delaware corporation ("Ross Stores").
3.2 Amended By-laws, dated August 25, 1994, incorporated by reference
to Exhibit 3.2 to the Form 10-Q filed by Ross Stores for its
quarter ended July 30, 1994.
10.1 Agreement of Lease, dated November 24, 1986, for Ross Stores'
corporate headquarters and distribution center in Newark, CA,
incorporated by reference to Exhibit 10.5 to the Form 8-B.
10.2 Revolving Credit Agreement, dated July 31, 1993, among Ross
Stores, Wells Fargo Bank, National Association, Bank of America,
National Trust and Savings Association, and Security Pacific
National Bank ("Banks"); and Wells Fargo Bank, National
Association, as agent for Banks, incorporated by reference to
Exhibit 10.17 on the Form 10-Q filed by Ross Stores for its
quarter ended July 31, 1993.
10.3 First Amendment to Revolving Credit Agreement, effective on July
31, 1994, by and among Ross Stores, Banks and Wells Fargo Bank,
National Association, as agent for Banks, incorporated by
reference to Exhibit 10.5 to the Form 10-Q filed by Ross Stores
for its quarter ended July 30, 1994.
10.4 Second Amendment to Revolving Credit Agreement, effective on June
15, 1995, by and among Ross Stores, Banks and Wells Fargo Bank,
National Association, as agent for Banks, incorporated by
reference to Exhibit 10.4 to the Form 10-Q filed by Ross Stores
for its quarter ended July 29, 1995.
10.5 Credit Agreement, dated as of June 22, 1994, among Ross Stores,
Bank of America National Trust and Savings Association as Agent,
the Industrial Bank of Japan as Co-Agent and the other financial
institutions party thereto, incorporated by reference to Exhibit
10.6 to the Form 10-Q filed by Ross Stores for its quarter ended
July 30, 1994.
10.6 First Amendment to Credit Agreement, dated as of June 20, 1995,
among Ross Stores, Bank of America National Trust and Savings
Association as Agent, the Industrial Bank of Japan as Co-Agent,
incorporated by reference to Exhibit 10.6 to the Form 10-Q filed
by Ross Stores for its quarter ended July 29, 1995.
10.7 Second Amendment to Credit Agreement, dated as of June 12, 1996,
Ross Stores, Bank of America National Trust and Savings
Association as Agent, the Industrial Bank of Japan as Co-Agent.
MANAGEMENT CONTRACTS AND COMPENSATORY PLANS
(EXHIBITS 10.8 - 10.30)
10.8 Amended and Restated 1992 Stock Option Plan, incorporated by
reference to the appendix to the Proxy Statement filed by Ross
Stores on April 24, 1995 for its Annual Stockholders Meeting held
May 25, 1995 ("1995 Proxy Statement").
13
Exhibit
Number Exhibit
10.9 Third Amended and Restated Ross Stores Employee Stock Purchase
Plan, incorporated by reference to the appendix to the 1995 Proxy
Statement.
10.10 Third Amended and Restated Ross Stores 1988 Restricted Stock Plan,
incorporated by reference to the appendix to the Proxy Statement
filed by Ross Stores on April 24, 1996 for its Annual Stockholders
Meeting held May 30, 1996 ("1996 Proxy Statement").
10.11 1991 Outside Directors Stock Option Plan, incorporated by
reference to the appendix to the 1996 Proxy Statement.
10.12 Ross Stores Executive Medical Plan, incorporated by reference to
Exhibit 10.13 to the 1993 Form 10-K filed by Ross Stores for its
year ended January 29, 1994 ("1993 Form 10-K").
10.13 Third Amended and Restated Ross Stores Executive Supplemental
Retirement Plan, incorporated by reference to Exhibit 10.14 to the
1993 Form 10-K.
10.14 Ross Stores Non-Qualified Deferred Compensation Plan, incorporated
by reference to Exhibit 10.15 to the 1993 Form 10-K.
10.15 Ross Stores Incentive Compensation Plan, incorporated by reference
to the appendix to the 1996 Proxy Statement.
10.16 Amended and Restated Employment Agreement between Ross Stores,
Inc. and Norman A. Ferber, effective as of June 1, 1995,
incorporated by reference to Exhibit 10.17 to the Form 10-Q filed
by Ross Stores for its quarter ended October 28, 1995.
10.17 Amendment to Amended and Restated Employment Agreement between
Ross Stores, Inc. and Norman A. Ferber, entered into July 29,
1996.
10.18 Agreement between Ross Stores, Inc. and Norman A. Ferber, dated
August 22, 1995, incorporated by reference to Exhibit 10.18 to the
Form 10-Q filed by Ross Stores for its quarter ended October 28,
1995.
10.19 Employment Agreement between Ross Stores and Melvin A. Wilmore,
effective as of March 15, 1994, incorporated by reference to
Exhibit 10.20 to the Form 10-Q filed by Ross Stores for its
quarter ended April 30, 1994.
10.20 Amendment to Employment and Stock Grant Agreement by and between
Ross Stores and Melvin A. Wilmore, effective as of March 16, 1995,
incorporated by reference to Exhibit 10.20 to the Form 10-Q filed
by Ross Stores for its quarter ended October 28, 1995.
10.21 Second Amendment to Employment Agreement by and between Ross
Stores and Melvin A. Wilmore, effective as of June 1, 1995,
incorporated by reference to Exhibit 10.21 to the Form 10-Q filed
by Ross Stores for its quarter ended October 28, 1995.
14
Exhibit Exhibit
Number
10.22 Third Amendment to Employment Agreement by and between Ross Stores
and Melvin A. Wilmore, entered into July 29, 1996.
10.23 Agreement between Ross Stores, Inc. and Melvin A. Wilmore, dated
August 22, 1995, incorporated by reference to Exhibit 10.22 to the
Form 10-Q filed by Ross Stores for its quarter ended October 28,
1995.
10.24 Employment Agreement between Ross Stores and Michael Balmuth,
effective as of February 1, 1995, incorporated by reference to
Exhibit 10.15 to the Form 10-Q filed by Ross Stores for its
quarter ended April 29, 1995.
10.25 Amendment to Employment Agreement between Ross Stores and Michael
Balmuth, effective as of June 1, 1995, incorporated by reference
to Exhibit 10.24 to the Form 10-Q filed by Ross Stores for its
quarter ended October 28, 1995.
10.26 Second Amendment to Employment Agreement between Ross Stores and
Michael Balmuth, entered July 29, 1996.
10.27 Employment Agreement between Ross Stores and Barry S. Gluck,
effective as of March 1, 1996, incorporated by reference to
Exhibit 10.23 to the Form 10-Q filed by Ross Stores for its
quarter ended May 4, 1996.
10.28 Employment Agreement between Ross Stores and Irene S. Jamieson,
effective as of March 1, 1996, incorporated by reference to
Exhibit 10.24 to the Form 10-Q filed by Ross Stores for its
quarter ended May 4, 1996.
10.29 Employment Agreement between Ross Stores and Barbara Levy,
effective as of March 1, 1996, incorporated by reference to
Exhibit 10.25 to the Form 10-Q filed by Ross Stores for its
quarter ended May 4, 1996.
10.30 Consulting Agreement between Ross Stores and Stuart G. Moldaw,
effective as of March 16, 1995, incorporated by reference to
Exhibit 10.16 to the Form 10-Q filed by Ross Stores for its
quarter ended April 29, 1995.
11 Statement re: Computation of Per Share Earnings.
15 Letter re: Unaudited Interim Financial Information.
27 Financial Data Schedules (submitted for SEC use only).
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("Amendment"), dated as
of June 12, 1996, is entered into by and among ROSS STORES, INC. (the
"Company"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
agent for itself and the Banks (the "Agent"), THE INDUSTRIAL BANK OF
JAPAN, LIMITED, as Co-Agent, and the several financial institutions
party to the Credit Agreement (collectively, the "Banks").
RECITALS
The Company, Banks, and Agent are parties to a Credit Agreement
dated as of June 22, 1994 (as previously amended, the "Credit
Agreement") pursuant to which the Agent and the Banks have extended
certain credit facilities to the Company. The Banks are willing to
amend the Credit Agreement subject to the terms and conditions of this
Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings, if any, assigned to them in
the Credit Agreement.
2. Amendments to Credit Agreement.
(a) The definition of "Applicable Margin" in Section 1.01 of
the Credit Agreement shall be amended to read as follows:
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0.000%; and
(ii) with respect to Offshore Rate Loans, 0.375%.
(b) The definition of "EBITDA" in Section 1.01 of the Credit
Agreement shall be amended to read as follows:
"EBITDA" means, for any period, for the Company and
its Subsidiaries on a consolidated basis, the sum of (a) the
net income (or net loss) for such period plus (b) depreciation
and interest expense and the amortization of intangibles, plus
(c) all accrued income taxes (excluding tax credits and tax
refunds); without giving effect to extraordinary losses or
extraordinary gains.
(c) The definition of "Leverage Ratio" is amended to read as
follows:
"Leverage Ratio" means the ratio of total consolidated current
and non-current liabilities, including liabilities under
guaranties and any other contingent obligation, but excluding
Straight Line Rent, to the aggregate of Tangible
2
Net Worth. "Straight Line Rent" means the amount of deferred rent
expense for retail stores, up to an amount not exceeding Fifteen
Million Dollars ($15,000,000); any deferred rent expense for
retail stores exceeding this amount shall be included as a
liability in the calculation of the Leverage Ratio.
(d) The definition of "Maturity Date" in Section 1.01 of the
Credit Agreement shall be amended to read as follows:
"Maturity Date" means July 1, 2001.
(e) The definition of "Revolving Termination Date" in Section
1.01 of the Credit Agreement shall be amended to read as follows:
"Revolving Termination Date" means the earlier to occur of:
(a) July 1, 1997; and
(b) the date on which the Aggregate Revolving
Commitment shall terminate in accordance with the provisions
of this Agreement.
(f) Section 6.02 of the Credit Agreement is amended to read
as follows:
6.02 Tangible Net Worth. The Company shall maintain on a
consolidated basis Tangible Net Worth in amounts not less than the
amounts indicated below at all times during the periods specified
below:
(a) The initial Tangible Net Worth requirements shall be
as follows:
Time Periods Tangible Net Worth
From the last day of the Fourth $220,000,000
Quarter in Fiscal Year 1995 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1996
From the last day of the Fourth $250,000,000
Quarter in Fiscal Year 1996 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1997
From the last day of the Fourth $280,000,000
Quarter in Fiscal Year 1997 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1998
3
From the last day of the Fourth $300,000,000
Quarter in Fiscal Year 1998 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1999
Thereafter $325,000,000
(b) From and after the time that the Company has
repurchased (under programs authorized on February 4, 1993 and
November 17, 1993 or thereafter) (a) two million of its
outstanding shares, plus (b) an additional number of its shares
for a consideration of at least $15,000,001; then the minimum
Tangible Net Worth requirement shall be as specified below.
Time Periods Tangible Net Worth
From the last day of the Fourth $210,000,000
Quarter in Fiscal Year 1995 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1996
From the last day of the Fourth $235,000,000
Quarter in Fiscal Year 1996 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1997
From the last day of the Fourth $270,000,000
Quarter in Fiscal Year 1997 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1998
From the last day of the Fourth $300,000,000
Quarter in Fiscal Year 1998 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1999
Thereafter $325,000,000
(c) From and after the time that the Company has
repurchased an additional number of its shares, beyond those
required by subparagraph (b) above, for a consideration of at
least $100,000,000; then the minimum Tangible Net Worth
requirement shall be as specified below.
Time Periods Tangible Net Worth
From the last day of the Fourth $210,000,000
Quarter in Fiscal Year 1995 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1996
From the last day of the Fourth $235,000,000
Quarter in Fiscal Year 1996 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1997
4
From the last day of the Fourth $250,000,000
Quarter in Fiscal Year 1997 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1998
From the last day of the Fourth $275,000,000
Quarter in Fiscal Year 1998 through
the day before the last day of the
Fourth Quarter in Fiscal Year 1999
Thereafter $300,000,000
(d) If the Company repurchases additional shares beyond
those specified in subparagraphs (b) and (c), then the minimum
Tangible Net Worth requirement figures stated in subparagraph (c)
shall be further reduced by an amount equal to fifty percent (50%)
of the consideration paid for such excess shares purchased;
provided, however, that in no event shall the minimum Tangible Net
Worth requirement for any period after January 31, 1998 be reduced
below Two Hundred Fifty Million Dollars ($250,000,000).
(e) The Company promises to notify the Agent, via a
certificate signed by a Responsible Officer, promptly when any of
the foregoing events has occurred.
(g) Section 6.03 of the Credit Agreement, entitled "Leverage
Ratio," is amended to read as follows:
6.03 Leverage Ratio. The Company shall maintain on a
consolidated basis a Leverage Ratio not greater than the amounts
indicated below at and as of the times specified below:
Date of Determination Leverage Ratio
End of First, Second and Third 1.70
Quarters in Fiscal Year 1996
December 31, 1996 1.25
End of Fiscal Year 1996 1.40
End of First, Second and Third 1.60
Quarters in Fiscal Year 1997
December 31, 1997 1.20
End of Fiscal Year 1997 1.35
End of First, Second and Third 1.50
Quarters in Fiscal Year 1998
December 31, 1998 1.20
5
End of Fiscal Year 1998 1.30
End of First, Second and Third 1.50
Quarters in Fiscal Year 1999
December 31, 1999 1.20
End of Fiscal Year 1999 1.30
End of First, Second and Third 1.40
Quarters in Fiscal Year 2000
December 31, 2000 1.10
End of Fiscal Year 2000 1.20
End of First Quarter in 1.40
Fiscal Year 2001
(h) The first sentence of Section 6.05 of the Credit
Agreement, entitled "Fixed Charge Coverage Ratio," is amended to read
as follows:
The Company shall maintain on a consolidated basis a ratio of (a)
the sum of EBITDA, rent expense and lease expense to (b) the sum
of rent expense, lease expense, all accrued income taxes
(excluding tax credits and tax refunds), interest expense, excess
dividends and the current portion of long term debt; at least
equal to 1.25:1.00.
3. Representations and Warranties. The Company hereby represents
and warrants to the Agent and the Banks as follows:
(a) No Default or Event of Default has occurred and is
continuing.
(b) The execution, delivery and performance by the Company of
this Amendment have been duly authorized by all necessary corporate
and other action and do not and will not require any registration
with, consent or approval of, notice to or action by, any Person
(including any Governmental Authority) in order to be effective and
enforceable. The Credit Agreement as amended by this Amendment
constitutes the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its respective terms,
without defense, counterclaim or offset.
(c) All representations and warranties of the Company
contained in the Credit Agreement are true and correct.
(d) The Company is entering into this Amendment on the basis
of its own investigation and for its own reasons, without reliance
upon the Agent and the Banks or any other Person.
6
4. Effective Date. This Amendment will become effective as of
June 12, 1996 (the "Effective Date"), provided that each of the
following conditions precedent is satisfied:
(a) The Agent has received from the Company and each of the
Banks a duly executed original (or, if elected by the Agent, an
executed facsimile copy) of this Amendment.
(b) The Agent has received from the Company a copy of a
resolution passed by the board of directors of such corporation,
certified by the Secretary or an Assistant Secretary of such
corporation as being in full force and effect on the date hereof,
authorizing the execution, delivery and performance of this Amendment.
(c) All representations and warranties contained herein are
true and correct as of the Effective Date.
5. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants
and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein to such Credit Agreement
shall henceforth refer to the Credit Agreement as amended by this
Amendment. This Amendment shall be deemed incorporated into, and a
part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective
successors and assigns. No third party beneficiaries are intended in
connection with this Amendment.
(c) This Amendment shall be governed by and construed in
accordance with the law of the State of California.
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument. Each of the parties hereto understands and agrees that
this document (and any other document required herein) may be
delivered by any party thereto either in the form of an executed
original or an executed original sent by facsimile transmission to be
followed promptly by mailing of a hard copy original, and that receipt
by the Agent of a facsimile transmitted document purportedly bearing
the signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the delivery
of a hard copy original. Any failure by the Agent to receive the hard
copy executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original of
such document of the party whose hard copy page was not received by
the Agent.
(e) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with
reference to the matters discussed herein and therein. This
7
Amendment supersedes all prior drafts and communications with respect
thereto.
(f) If any term or provision of this Amendment shall be
deemed prohibited by or invalid under any applicable law, such
provision shall be invalidated without affecting the remaining
provisions of this Amendment or the Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the Agent
and the Banks, upon demand, for all costs and expenses (including
allocated costs of in-house counsel) incurred in connection with the
development, preparation, negotiation, execution and delivery of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first above written.
ROSS STORES, INC.
By: /s/ John Vuko
Title: SVP & Controller
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Wendy Young
Wendy Young, Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, as Co-Agent and as a Bank
By: /s/ Yoh Nakahara
Yoh Nakahara
Title:General Manager
By:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/ Hagop V. Bouldoukian
Hagop V. Bouldoukian
Vice President
AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the "Amendment") is made and entered into this 29th day of
July, 1996, by and between ROSS STORES, INC. (the "Company") and
NORMAN A. FERBER (the "Executive"). The Executive and the Company
previously entered into an Amended and Restated Employment Agreement
as of June 1, 1995, as amended thereafter (the "Agreement"), and it is
now the intention of the Executive and the Company to further amend
the Agreement as set forth below. Accordingly, the Executive and the
Company now enter into this Amendment.
I. The Executive and the Company hereby amend the
Agreement effective as of September 1, 1996, as follows:
A. Positions and Duties. Paragraph 2 [Positions and
Duties] of the Agreement is amended in its entirety as follows:
"Subject to paragraph 3, the
Executive shall continue to serve as the Chairman
of the Board and, through August 31, 1996, as
Chief Executive Officer of the Company with
overall responsibility for the Company's corporate
policy-making and the accomplishment of its plan
and objectives all on a mutually-agreeable work
schedule. The Executive hereby resigns as Chief
Executive Officer of the Company effective
midnight on August 31, 1996. While acting as
Chief Executive Officer, the Executive shall
report directly to the Company's Board and shall
devote substantially all of his working time and
efforts to the business and affairs of the
Company. During the term of his employment, the
Executive may engage in outside activities
provided those activities do not detract from his
duties and responsibilities hereunder, and
provided further that the Executive gives written
notice to the Board of any significant outside
business activity in which he plans to become
involved, whether or not such activity is pursued
for profit. During the term of his employment,
the Executive may not render services to any
business competitive with any existing business of
the Company. During the term of his consultancy,
the Executive shall not provide any labor, work,
services or assistance to (whether as an officer,
director, employee, partner, agent, owner,
independent contractor or otherwise) Burlington
Coat Factory Warehouse Corporation, Dillard
Department Stores, Inc., Filene's Basement Corp.,
The Federated Stores, The May Department Stores
Company, The TJX Companies, Inc., and/or Value
City Department Stores, Inc., as well as all
subsidiaries, divisions and/or the surviving
entity of any of the above that do business in the
retail industry in the case of a merger or
acquisition.
2
B. Consulting Relationship. Paragraph 3 [Consulting
Relationship] of the Agreement is amended in its entirety as follows:
"During the period commencing on
September 1, 1996, and ending on January 31, 1998
(the "Consultancy Termination Date"), the
Executive shall cease to be employed by and shall
be retained as a consultant to the Company and
shall be available to spend an average of between
two and three days a week (at times reasonably
convenient to the Executive and the Company)
performing such consulting services as shall be
reasonably requested by the Chief Executive
Officer of the Company."
C. Consulting Fees. Subparagraph 5(a)(iii) of the
Agreement is amended in its entirety as follows:
"(iii) The Executive's salary shall
be payable in equal installments in accordance
with the Company's normal payroll practices
applicable to senior officers. Consulting fees
shall be payable to the Executive monthly or more
frequently as mutually agreed upon between the
Executive and the Company."
D. Other Benefits. Paragraph 5(d) [Other Benefits]
of the Agreement is amended in its entirety as follows:
(i) Until his death or the date of
his 65th birthday, whichever occurs first, the
Executive shall be entitled to continue to
participate (at no cost to the Executive) in the
following Company employee benefit plans and
arrangements in effect on the date hereof in which
the Executive now participates: executive
medical, dental, vision and mental health
insurance; life insurance; accidental death and
dismemberment insurance; travel insurance; group
excess personal liability; and matching of
Executive's 401(k) and supplemental 401(k)
contributions (the "Matching Contributions"). The
Company shall not make any changes in such plans
or arrangements that would adversely affect the
Executive's rights or benefits thereunder, unless
such change occurs pursuant to a program
applicable to all senior executives of the Company
and does not result in a proportionately greater
reduction in the rights of, or benefits to, the
Executive as compared with any other senior
executive of the Company. The Executive shall be
entitled to participate in or receive benefits
under any employee benefit plan or arrangement
made available by the Company in the future to its
executives and key management employees, subject
to, and on a basis consistent with, the terms,
conditions and overall administration of such
plans and arrangements. Except as otherwise
specifically provided herein, nothing paid to the
Executive under any plan or arrangement presently
in effect or
3
made available in the future shall
be in lieu of the salary and consulting fee or
bonus payable under subsections (a) and (b).
(ii) The foregoing notwithstanding, during
the period of his consultancy the Executive shall not
participate in any new awards under the Company's stock
option, stock purchase and restricted stock plans.
(iii) Until his death, the Executive
and all members of his immediate family
shall be entitled to Company employee discount
cards.
(iv) Until his death or the date of
his 65th birthday, whichever occurs first, the
Executive shall be reimbursed by the Company on an
annual basis for any estate planning fees or
expenses actually incurred by the Executive, up to
a maximum annual reimbursement of $3,000.
(v) The consulting fees payable to
the Executive pursuant to paragraph 5(a) shall be
appropriately increased to enable the Executive to
procure (to the extent available) the benefits
described in subsections (i) (excluding the
Matching Contributions), (iii) and (iv) at no
after tax cost to the Executive and such increase
shall reimburse the Executive for additional taxes
associated with procuring such benefits. After
Executive ceases to serve as a consultant to the
Company, the Executive shall continue to be
entitled to these benefits and the Company shall
nevertheless continue to make annual (or more
frequent) payments to Executive to fully reimburse
Executive for all taxes associated with
Executive's continued receipt of such benefits
(excluding the Matching Contributions).
E. Services Furnished. Paragraph 5(f) [Services
Furnished] of the Agreement is amended in its entirety as follows:
Until the later of (a) the
termination of the Executive's consulting
relationship with the Company for any reason, or
(b) January 30, 1999, the Company shall furnish
the Executive, at the Company's expense, with
office space comparable to his current office in
the San Francisco Bay Area at the executive's
choice, and such related services (including, but
not limited to, secretarial support (which may
include his current secretary to the extent she is
able and willing to provide such services),
telephone service, and facsimile and copying
services) as are suitable and adequate for the
performance of the Executive's consulting duties
for the Company.
4
F. Continued Benefits Upon Any Termination.
Paragraph 10(f) [Continued Benefits Upon Any Termination] of the
Agreement shall be deleted in its entirety.
G. Miscellaneous. The following sentence shall be
added to the end of paragraph 21 [Miscellaneous]:
"Executive's rights under paragraph 5(d)
[Other Benefits] of this Agreement
shall survive the termination (other than for
death) of the Executive's status as an employee or
consultant to the Company."
H. No Other Modifications. Except as modified by
this Amendment, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
to Amended and Restated Employment Agreement as of the date and year
first above written.
ROSS STORES, INC. EXECUTIVE
By: /s/ George Organ /s/Norman A. Ferber
George P. Orban Norman A. Ferber
Chairman, Compensation Committee
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (the
"Amendment") is made and entered into this 29th day of
July, 1996, by and between ROSS STORES, INC. (the "Company") and
MELVIN A. WILMORE (the "Executive"). The Executive and the
Company previously entered into an Employment Agreement of March
15, 1994, as amended thereafter (the "Agreement"), and it is now
the intention of the Executive and the Company to further amend
the Agreement as set forth below. Accordingly, the Executive and
the Company now enter into this Amendment.
I. The Executive and the Company hereby amend the
Agreement effective as of September 1, 1996, as follows:
A. Term. The termination date referred to
in the second line of paragraph 1 of the Agreement is changed to
February 3, 2000.
B. Reporting. Paragraph 2 of the Agreement is
hereby amended to provide that the Executive shall report to the
Chief Executive Officer and Vice Chairman of the Company.
C. Salary. The Executive's salary, referenced
in paragraph 4(a) of the Agreement, shall be not less than
$550,000 per annum.
D. No Other Modifications. Except as modified
by this Amendment, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this
Third Amendment to Employment Agreement as of the date and year
first above written.
ROSS STORES, INC. EXECUTIVE
By: /s/Norman A. Ferber /s/M. Wilmore
Norman A. Ferber Melvin A. Wilmore
Chairman of the Board
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT (the
"Amendment") is made and entered into this 29th day of
July, 1996, by and between ROSS STORES, INC. (the "Company") and
MICHAEL BALMUTH (the "Executive"). The Executive and the Company
previously entered into an Employment Agreement of February 1,
1995, as amended thereafter (the "Agreement"), and it is now the
intention of the Executive and the Company to further amend the
Agreement as set forth below. Accordingly, the Executive and the
Company now enter into this Amendment.
I. The Executive and the Company hereby amend the
Agreement effective as of September 1, 1996, as follows:
A. Term. The termination date referred to in
the second line of paragraph 1 of the Agreement is changed to
February 3, 2000.
B. Position and Duties. The first two sentences
of paragraph 2 of the Agreement are amended in their entirety as
follows:
The Executive shall serve as
the Vice Chairman of the Board of
Directors and Chief Executive Officer of
the Company with overall responsibility
for its corporate policy making,
organization and operation and the
accomplishment of its plans and
objectives. The Executive shall report
directly to the Company's Board of
Directors.
C. Salary. The Executive's salary, referenced
in paragraph 4(a) of the Agreement, shall be not less than
$575,000 per annum.
D. Employment and Post-Employment Restrictions.
Paragraph 10 [Employment Restriction] of the Agreement is amended
in its entirety as follows:
The Company and the Executive
acknowledge that the Company has a
special interest in and derives
significant benefit from the unique
skills and experience of the Executive.
In addition, the Executive will use and
have access to some of the Company's
proprietary and valuable Confidential
Information during the course of the
Executive's employment. Accordingly,
except as hereafter noted, during the
term of the Executive's employment with
the Company and in the event that the
Executive voluntarily terminates his
employment with the Company prior to
February 3, 2000, the Executive agrees
that for a period of three years
following his voluntary termination
pursuant to paragraph 7(g) [Voluntary
Termination], he shall not provide any
labor, work, services or assistance to
(whether as an officer, director,
employee, partner, agent, owner,
2
independent contractor,
stockholder or otherwise) Burlington
Coat Factory Warehouse Corporation,
Dillard Department Stores, Inc.,
Filene's Basement Corp., The Federated
Stores, The May Department Stores
Company, The TJX Companies, Inc. and
Value City Department Stores, Inc. as
well as all subsidiaries, divisions
and/or the surviving entity of any of
the above that do business in the retail
industry in the case of a merger or
acquisition. However, this subsection
shall not prohibit the Executive from
making any investment of 1% or less of
the equity securities of any publicly-
traded corporation that is engaged in
any business of the type or character
engaged in by the Company. The
foregoing restrictions shall have no
force or effect in the event that (i)
the Executive's employment with the
Company is terminated (1) by the Company
pursuant to paragraph 7(c) [with Cause],
7(d) [without Cause] or (2) by the
Executive pursuant to either paragraph
7(e) [Termination by the Executive for
Good Reason] or paragraph 7(f)
[Termination Following Change of
Control] or (ii) the Company fails to
approve or grant an extension of this
Agreement in accordance with paragraph 1
hereof.
During the term of the Executive's employment with the
Company and for a period of three years following the termination
of that employment for any reason, the Executive shall not
directly or indirectly solicit any other employee of the Company
to terminate his or her employment with the Company.
E. No Other Modifications. Except as modified
by this Amendment, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this
Second Amendment to Employment Agreement as of the date and year
first above written.
ROSS STORES, INC. EXECUTIVE
By: /s/Norman A. Ferber /s/Michael Balmuth
Norman A. Ferber Michael Balmuth
Chairman of the Board
EXHIBIT 11
ROSS STORES, INC.
________________________________________
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Amounts in thousands, except per share amounts)
Three Months Ended
August 3, 1996 July 29, 1995
Fully Fully
Primary Diluted Primary Diluted
Net earnings 18,649 18,649 10,336 10,336
===== ===== ====== =====
Weighted average shares outstanding:
Common shares 25,297 25,297 24,566 24,566
Common equivalent shares:
Stock options 632 633 120 160
___ ____ ____ _____
Weighted average common and common
equivalent shares outstanding 25,929 25,930 24,686 24,726
===== ===== ===== =====
Earnings per common and common $.72 $.72 $.42 $.42
equivalent share
Six Months Ended
August 3, 1996 July 29, 1995
Fully Fully
Primary Diluted Primary Diluted
Net earnings 32,584 32,584 14,203 14,203
====== ====== ====== ======
Weighted average shares outstanding:
Common shares 25,163 25,163 24,550 24,550
Common equivalent shares:
Stock options 643 652 120 159
___ ___ ___ ___
Weighted average common and common
equivalent shares outstanding 25,806 25,815 24,670 24,709
====== ====== ====== ======
Earnings per common and common
equivalent share $1.26 $1.26 $.58 $.57
===== ===== ==== ====
EXHIBIT 15
September 12, 1996
Ross Stores, Inc.
Newark, California
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
interim condensed consolidated financial statements of Ross Stores,
Inc. for the three-month and six-month periods ended August 3, 1996
and July 29, 1995, as indicated in our independent accountants' report
dated August 23, 1996; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our report referred to above, which is included in
your Quarterly Report on Form 10-Q for the quarter ended August 3,
1996 is incorporated by reference in Registration Statements Nos. 33-
61373, 33-51916, 33-51896, 33-51898, 33-41415, 33-41413 and 33-29600
of Ross Stores, Inc. on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is not considered a part of
the Registration Statement prepared or certified by an accountant or a
report prepared or certified by an accountant within the meaning of
Sections 7 and 11 of that Act.
Yours truly,
Deloitte & Touche LLP
San Francisco, CA
5
0000745732
ROSS STORES, INC.
1,000
6-MOS
FEB-01-1997
FEB-04-1996
AUG-03-1996
35,080
0
15,071
0
357,778
420,418
322,906
144,685
615,194
271,662
9,665
0
0
252
153,745
615,194
776,604
776,604
549,675
722,297
0
0
215
54,307
21,723
32,584
0
0
0
32,584
1.26
1.26
