UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (date of earliest event reported):
August 22, 2007

ROSS STORES, INC.
(Exact name of registrant as specified in its charter)
Delaware 	0-14678 	94-1390387 	
(State or other jurisdiction of 	(Commission File No.) 	(I.R.S. Employer Identification 	
incorporation) 	 	No.) 	

4440 Rosewood Drive, Pleasanton, California, 94588-3050
(Address of principal executive offices)

Registrant’s telephone number, including area code:
(925) 965-4400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 	ROSS STORES, INC. 	4440 Rosewood Drive, Pleasanton, California 94588-3050 	(925) 965-4400 	

Item 2.02 Results of Operations and Financial Condition.

On August 22, 2007, the Company issued a press release regarding the Company’s financial results for its fiscal quarter ended August 4, 2007. The full text of the Company’s press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

             (c) Exhibits.
Exhibit 	 	
No. 	 Description 	
 	
99.1 	August 22, 2007 Press Release by Ross Stores, Inc.* 	

*Pursuant to Item 2.02 of Form 8-K, Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 22, 2007
 	ROSS STORES, INC. 	
 	Registrant 	

 	By: 	/s/J. Call 	
 	 	John G. Call 	
 	 	Senior Vice President, Chief Financial Officer, Principal 	
 	 	Accounting Officer and Corporate Secretary 	

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Exhibit 99.1

FOR IMMEDIATE RELEASE
Contact: 	John G. Call 	Katie Loughnot 	
 	Senior Vice President 	Vice President, Investor Relations 	
 	Chief Financial Officer 	(925) 965-4509 	
 	(925) 965-4315 	Email: katie.loughnot@ros.com 	

ROSS STORES REPORTS SECOND QUARTER EARNINGS
AND PROVIDES SECOND HALF 2007 SALES AND EARNINGS GUIDANCE

     Pleasanton, California, August 22, 2007 --Ross Stores, Inc. (ROST) today reported earnings per share for the 13 weeks ended August 4, 2007 of $.37 and net earnings of $50.9 million. For the 13 weeks ended July 29, 2006, earnings per share were $.32 and net earnings totaled $45.4 million. Fiscal 2007 second quarter sales increased 10% to $1.445 billion, with comparable store sales for the period up 2% on top of a 4% increase in the prior year.

     For the six months ended August 4, 2007, earnings per share were $.85 and net earnings totaled $117.9 million. For the six months ended July 29, 2006, earnings per share were $.73 and net earnings totaled $104.6 million. Sales for the first six months of 2007 increased 10% to $2.855 billion, with comparable store sales up 1% on top of a 5% gain in the prior year.

     Michael Balmuth, Vice Chairman, President and Chief Executive Officer, commented, “The strongest sales gains during the second quarter were in the Northwest and the Mid Atlantic, while Dresses and Home were the best-performing merchandise categories. As a percent of sales, lower general and administrative and occupancy expenses more than offset higher freight, distribution and store costs, resulting in a 20 basis point improvement in operating margin for the quarter.”

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     Mr. Balmuth also noted, “Our balance sheet and cash flows remained healthy as we ended the first half of the year. We continued to return capital to stockholders through our stock repurchase and dividend programs. During the first six months of 2007, we repurchased 3.1 million shares of common stock for an aggregate of $101 million. We are on track to complete during 2007 the remaining $99 million of our two-year $400 million stock repurchase program authorized by our Board of Directors.”

     Mr. Balmuth continued,“Looking ahead, we are slightly more cautious now in our second half outlook as a result of a combination of macro economic factors, recent results and projections from other retailers, and our own sales trend that slowed versus plan beginning in mid-July. Although we hope to perform better, in light of these issues, we believe it is prudent to manage our business with somewhat more conservative sales and margin assumptions for the balance of the year.”

     “We are now projecting same store sales growth of 1% to 3% for the third and fourth quarters, compared to our prior forecast of up 3% to 4% for both periods. Earnings per share are projected to be in the range of $.33 to $.37 for the 13 weeks ending November 3, 2007 and $.62 to $.68 for the 13 weeks ending February 2, 2008. Based on these projections, earnings per share for the fiscal year ending February 2, 2008 are forecast to be in the range of $1.80 to $1.90. This compares to our original earnings per share guidance of $1.85 to $1.95,” Mr. Balmuth concluded.

     Reported earnings per share for the fiscal 2006 third quarter, fourth quarter and fiscal year were $.31, $.66 and $1.70, respectively. In addition, last year’s fourth quarter and fiscal year results included income equivalent to about $.07 per share related to the 53 rd  week in fiscal 2006.

     The Company will provide additional details concerning its second quarter results, projected second half guidance and its longer-term business outlook on a conference call to be held on Wednesday, August 22, 2007 at 11:00 a.m. 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 through November 2, 2007 at the website address and through August 29, 2007 via a telephone recording at 402-220-5900, PIN #2342.

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     Forward-Looking Statements: This press release and the recorded conference call comments on our website contain forward-looking statements regarding expected sales and earnings levels that are subject to risks and uncertainties which could cause our actual results to differ materially from management’s current expectations. The words “plan,” “expect,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “looking ahead” and similar expressions identify forward-looking statements. Risk factors for Ross Dress for Less ®  (“Ross”) and dd’s DISCOUNTS  ® include, without limitation, our ability to convert certain Albertsons LLC real estate sites to the Ross and dd’s DISCOUNTS formats in a timely and cost effective manner and on acceptable terms, and the ability to achieve targeted levels of sales, profits and cash flows from these acquired store locations; our ability to effectively operate our various supply chain, core merchandising and other information systems; our ability to improve our merchandising capabilities through the implementation of new processes and systems enhancements; achieving and maintaining targeted levels of productivity and efficiency in our distribution centers; potential pressure on freight costs from higher-than-expected fuel surcharges; 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, including the potential impact from higher mortgage interest rates and higher gas prices; changes in geopolitical and general economic conditions; unseasonable weather trends; disruptions in supply chain; lower than planned gross margin, including higher than planned markdowns and higher than expected inventory shortage; greater than planned operating costs; our ability to continue to purchase attractive brand-name merchandise at desirable discounts; our ability to identify and successfully enter new geographic markets; and our ability to attract and retain personnel with the retail talent necessary to execute our strategies. Other risk factors are detailed in our SEC filings including, without limitation, the Form 10-K for fiscal 2006 and Form 10-Q’s and 8-K’s for fiscal 2007. 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 our outlook at any other point in time. We do not undertake to update or revise these forward-looking statements.

* * * * *

     Ross Stores, Inc., a Fortune 500 and Nasdaq 100 (ROST) company headquartered in Pleasanton, California, is the nation’s second largest off-price company with fiscal 2006 revenues of $5.6 billion. As of August 4, 2007, the Company operated 817 Ross Dress for Less ® (“Ross”) stores and 45 dd’s DISCOUNTS ®  locations, compared to 744 Ross and 26 dd’s DISCOUNTS locations at the end of the same period last year. Ross offers first-quality, in-season, name brand and designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 60 percent off department and specialty store regular prices. dd’s DISCOUNTS features a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20 to 70 percent off moderate department and discount store regular prices. Additional information is available on the Company’s website at www.rossstores.com.

* * * * *

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Ross Stores, Inc.
Condensed Consolidated Statements of Earnings
 	 	 Three Months Ended 	 	 Six Months Ended 	
 	 	  August 4,	 	  July 29,	 	  August 4,	 	  July 29,	
($000, except stores and per share data, unaudited) 	     	  2007	     	  2006	     	  2007	     	  2006	
Sales 	 	$	1,444,632	 	$	1,308,052	 	 	$	2,855,173	 	 	$	2,599,728	 	
 	
Costs and expenses 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Cost of goods sold 	 	 	1,131,286	 	 	1,024,130	 	 	 	2,202,564	 	 	 	2,012,966	 	
     Selling, general and administrative 	 	 	229,326	 	 	210,635	 	 	 	459,529	 	 	 	417,802	 	
     Interest (income) expense, net 	 	 	65	 	 	(1,554	) 	 	 	(1,326	) 	 	 	(3,438	) 	
          Total costs and expenses 	 	 	1,360,677	 	 	1,233,211	 	 	 	2,660,767	 	 	 	2,427,330	 	
 	
Earnings before taxes 	 	 	83,955	 	 	74,841	 	 	 	194,406	 	 	 	172,398	 	
 	
Provision for taxes on earnings 	 	 	33,092	 	 	29,464	 	 	 	76,499	 	 	 	67,804	 	
Net earnings 	 	$	50,863	 	$	45,377	 	 	$	117,907	 	 	$	104,594	 	

Earnings per share 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Basic 	 	$	0.37	 	$	0.32	 	 	$	0.86	 	 	$	0.74	 	
     Diluted 	 	$	0.37	 	$	0.32	 	 	$	0.85	 	 	$	0.73	 	

Weighted average shares outstanding (000) 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Basic 	 	 	136,052	 	 	140,348	 	 	 	136,569	 	 	 	140,991	 	
     Diluted 	 	 	138,280	 	 	142,698	 	 	 	138,992	 	 	 	143,454	 	

Dividends per share 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Cash dividends declared per share 	 	$	0.08	 	$	0.06	 	 	$	0.08	 	 	$	0.06	 	

Stores open at end of period 	 	 	862	 	 	770	 	 	 	862	 	 	 	770	 	

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Ross Stores, Inc.
Condensed Consolidated Balance Sheets
 	 	  August 4,	 	  July 29,	
($000, unaudited)	     	  2007	     	  2006	
Assets 	 	 	 	 	 	 	
 	
Current Assets 	 	 	 	 	 	 	
     Cash and cash equivalents	 	$	132,808	 	$	59,351	
     Short-term investments	 	 	31,263	 	 	7,417	
     Accounts receivable	 	 	42,071	 	 	33,904	
     Merchandise inventory	 	 	1,070,376	 	 	959,792	
     Prepaid expenses and other	 	 	70,396	 	 	50,567	
     Deferred income taxes	 	 	30,942	 	 	20,014	
          Total current assets	 	 	1,377,856	 	 	1,131,045	
 	
Property and equipment, net	 	 	790,298	 	 	733,905	
Other long-term assets	 	 	68,249	 	 	58,057	
Long-term investments	 	 	32,476	 	 	13,140	
Total assets	 	$	2,268,879	 	$	1,936,147	

Liabilities and stockholders' Equity 	 	 	 	 	 	 	
 	
Current Liabilities 	 	 	 	 	 	 	
     Accounts payable, accrued expenses and other	 	$	930,789	 	$	860,591	
          Total current liabilities	 	 	930,789	 	 	860,591	
 	
Long-term debt	 	 	150,000	 	 	  -	
Other long-term liabilities	 	 	169,045	 	 	123,760	
Deferred income taxes	 	 	81,997	 	 	94,747	
 	
Commitments and contingencies	 	 	 	 	 	 	
 	
Stockholders' Equity 	 	 	937,048	 	 	857,049	
     Total liabilities and stockholders' equity	 	$	2,268,879	 	$	1,936,147	

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Ross Stores, Inc.
Condensed Consolidated Statements of Cash Flows
 	 	 Six Months Ended 	
 	 	August 4,	 	July 29,	
($000, unaudited)	     	2007	     	2006	
Cash Flows From Operating Activities 	 	 	 	 	 	 	 	 	
Net earnings	 	$	117,907	 	 	$	104,594	 	
Adjustments to reconcile net earnings to net cash from	 	 	 	 	 	 	 	 	
   operating activities:	 	 	 	 	 	 	 	 	
     Depreciation and amortization	 	 	58,006	 	 	 	50,915	 	
     Stock-based compensation	 	 	13,049	 	 	 	13,621	 	
     Deferred income taxes	 	 	(18,905	)	 	 	(3,092	)	
     Tax benefit from equity issuance	 	 	5,505	 	 	 	6,280	 	
     Excess tax benefits from stock-based compensation	 	 	(4,533	)	 	 	(1,243	)	
Change in assets and liabilities:	 	 	 	 	 	 	 	 	
     Merchandise inventory	 	 	(18,647	)	 	 	(21,701	)	
     Other current assets, net	 	 	(38,117	)	 	 	(18,259	)	
     Accounts payable	 	 	(88,665	)	 	 	71,954	 	
     Other current liabilities	 	 	(46,917	)	 	 	(36,743	)	
     Other, net	 	 	28,965	 	 	 	2,770	 	
     Net cash provided by operating activities	 	 	7,648	 	 	 	169,096	 	
 	
Cash Flows Used in Investing Activities 	 	 	 	 	 	 	 	 	
Purchase of assets under lease	 	 	-	 	 	 	(87,329	)	
Additions to property and equipment	 	 	(107,285	)	 	 	(58,794	)	
Purchases of investments	 	 	(46,918	)	 	 	(47,550	)	
Proceeds from investments	 	 	19,618	 	 	 	50,765	 	
     Net cash used in investing activities	 	 	(134,585	)	 	 	(142,908	)	
 	
Cash Flows Used in Financing Activities 	 	 	 	 	 	 	 	 	
Payment of term debt	 	 	-	 	 	 	(50,000	)	
Issuance of common stock related to stock plans	 	 	11,861	 	 	 	8,550	 	
Excess tax benefits from stock-based compensation	 	 	4,533	 	 	 	1,243	 	
Treasury stock purchased	 	 	(2,919	)	 	 	(2,352	)	
Repurchase of common stock	 	 	(100,578	)	 	 	(98,867	)	
Dividends paid	 	 	(20,540	)	 	 	(17,178	)	
     Net cash used in financing activities	 	 	(107,643	)	 	 	(158,604	)	
Net decrease in cash and cash equivalents	 	 	(234,580	)	 	 	(132,416	)	
Cash and cash equivalents:	 	 	 	 	 	 	 	 	
     Beginning of period	 	 	367,388	 	 	 	191,767	 	
     End of period	 	$	132,808	 	 	$	59,351	 	
 	
Supplemental Cash Flow Disclosures 	 	 	 	 	 	 	 	 	
Interest paid	 	$	4,834	 	 	$	759	 	
Income taxes paid	 	$	119,628	 	 	$	102,642	 	
 	
Non-Cash Investing Activities 	 	 	 	 	 	 	 	 	
Change in fair value of investment securities	 	$	55	 	 	$	(192	)	

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