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 October 31, 1998
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 94-1390387
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8333 Central Avenue, Newark, 94560-3433
California (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, (510) 505-4400
including area code
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 November 28, 1998 was 46,081,941.
<PAGE> 2
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROSS STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($000) October 31, January 31, November 1,
ASSETS 1998 1998 1997
(Unaudited) (Note A) (Unaudited)
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents $26,657 $56,369 $21,737
Accounts receivable 12,212 8,122 9,720
Merchandise inventory 511,484 418,825 467,947
Prepaid expenses and other 16,371 15,108 14,518
________ _______ __________
Total Current Assets $566,724 $498,424 $513,922
Property And Equipment
Land and buildings 48,789 24,115 24,115
Fixtures and equipment 207,856 190,186 184,265
Leasehold improvements 139,296 144,247 142,598
Construction-in-progress 29,861 25,763 11,120
_______ _______ _______
425,802 384,311 362,098
Less accumulated depreciation and amortization 185,965 179,590 171,779
_______ _______ _______
239,837 204,721 190,319
Other assets 37,839 34,808 32,802
________ ________ ________
$844,400 $737,953 $737,043
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $228,261 $201,998 $205,249
Accrued expenses and other 141,782 82,290 103,044
Accrued payroll and benefits 35,723 39,458 42,740
_______ _______ _______
Total Current Liabilities 405,766 323,746 351,033
Long-term debt 30,000 25,000
Other liabilities 38,347 33,526 32,089
Stockholders' Equity
Capital stock 460 479 479
Additional paid-in capital 198,873 195,562 168,595
Retained earnings 170,954 184,640 159,847
_______ _______ _______
370,287 380,681 328,921
________ ________ ________
$844,400 $737,953 $737,043
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 3
<TABLE>
<CAPTION>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended Nine Months Ended
________________________ __________________________
October 31, November 1, October 31, November 1,
($000 except per share data, unaudited) 1998 1997 1998 1997
<S> <C> <C> <C> <C>
Sales $531,139 $482,875 $1,552,390 $1,416,395
Costs and Expenses
Cost of goods sold and occupancy 365,654 334,965 1,074,466 985,587
General, selling and administrative 110,593 98,080 308,005 280,300
Depreciation and amortization 8,653 7,866 24,765 22,776
Interest expense (income) 329 206 459 (277)
_______ _______ __________ ________
485,229 441,117 1,407,695 1,288,386
Earnings before taxes 45,910 41,758 144,695 128,009
Provision for taxes on earnings 17,905 16,703 56,431 51,203
_______ _______ _________ _________
Net earnings $28,005 $25,055 $88,264 $76,806
Net earnings per share:
Basic $.60 $.51 $1.86 $1.56
Diluted $.59 $.50 $1.83 $1.52
Weighted average shares outstanding:
Basic 46,733 48,786 47,346 49,325
Diluted 47,436 49,841 48,199 50,400
Stores open at end of period 350 326 350 326
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 4
<TABLE>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
_________________
October 31, November 1,
($000, unaudited) 1998 1997
<S> <C> <C>
Cash Flows From Operating Activities
Net earnings $88,264 $76,806
Adjustments to reconcile net earnings to net cash provided
by (used in) operating activities:
Depreciation and amortization of property and equipment 24,765 22,776
Other amortization 7,105 6,261
Change in assets and liabilities:
Merchandise inventory (92,659) (94,258)
Other current assets - net (5,352) (3,118)
Accounts payable 28,899 23,368
Other current liabilities - net 14,436 7,720
Other 3,542 1,290
______ _______
Net cash provided by operating activities 69,000 40,845
Cash Flows From Investing Activities
Additions to property and equipment (64,389) (26,712)
________ ________
Net cash used in investing activities (64,389) (26,712)
Cash Flows From Financing Activities
Borrowing under lines of credit 43,500 22,400
Proceeds of long-term debt 29,937 24,941
Issuance of common stock related to stock plans 7,138 8,115
Repurchase of common stock (107,083) (85,965)
Dividends paid (7,815) (6,664)
__________ ________
Net cash used in financing activities (34,323) (37,173)
__________ ________
Net Decrease In Cash (29,712) (23,040)
Cash and cash equivalents:
Beginning of year 56,369 44,777
_______ _______
End of quarter $26,657 $21,737
Interest Paid $710 $130
Income Taxes Paid $49,443 $69,976
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE> 5
ROSS STORES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Nine Months Ended October 31, 1998 and November 1, 1997
(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 October 31, 1998 and November 1, 1997; the
interim results of operations for the three and nine months ended
October 31, 1998 and November 1, 1997; and changes in cash flows for
the nine months ended October 31, 1998 and November 1, 1997. The
balance sheet at January 31, 1998, 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 January 31, 1998. 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 interim condensed consolidated financial
statements. The interim condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial
statements, including notes thereto, for the year ended January 31,
1998.
Diluted earnings per share reflects the potential dilution that could
occur if options to issue common stock were exercised into common
stock.
The results of operations for the three and nine month periods herein
presented are not necessarily indicative of the results to be expected
for the full year.
The condensed consolidated financial statements at October 31, 1998
and November 1, 1997, and for the three and nine 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.
<PAGE> 6
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Stockholders of Ross Stores, Inc.
Newark, California
We reviewed the accompanying condensed consolidated balance sheets of
Ross Stores, Inc. (the "Company") as of October 31, 1998 and November
1, 1997, and the related condensed consolidated statements of earnings
for the three-month and nine-month periods then ended and the related
condensed consolidated statements of cash flows for the nine-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 objectives 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 January 31, 1998, 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 17, 1998,
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 January 31,
1998 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
November 25, 1998
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
This section and other parts of this Form 10-Q contain forward looking
statements that involve risks and uncertainties. The Company's actual
results may vary significantly from the results discussed in the
forward looking statements. Factors that might cause such differences
include, but are not limited to, those discussed in the subsection
entitled "Forward Looking Statements and Factors That May Affect
Future Performance" below. The following discussion should be read in
conjunction with the condensed consolidated financial statements and
notes thereto included elsewhere in this Form 10-Q and the
consolidated financial statements in the Company's 1997 Form 10-K.
All information is based on the Company's fiscal calendar.
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
PERCENTAGE OF SALES
Three Months Ended Nine Months Ended
October 31, November 1, October 31, November 1,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
SALES
Sales ($000) $531,139 $482,875 $1,552,390 $1,416,395
Sales growth 10.0% 19.7% 9.6% 20.0%
Comparable store sales growth 3% 12% 4% 12%
COSTS AND EXPENSES
Cost of goods sold and occupancy 68.8% 69.4% 69.2% 69.6%
General, selling and administrative 20.8% 20.3% 19.8% 19.8%
Depreciation and amortization 1.6% 1.6% 1.6% 1.6%
Interest expense (income) 0.1% 0% 0% (0%)
NET EARNINGS 5.3% 5.2% 5.7% 5.4%
</TABLE>
Sales
The results of operations for the three and nine months ended October
31, 1998, over the same periods last year, reflect an increase in
sales due to a greater number of open stores during the current period
as well as an increase in comparable store sales.
Costs and Expenses
The decreases from the prior year in cost of goods sold and occupancy
expense as a percentage of sales for the three and nine month periods
ended October 31, 1998 were primarily due to (i) leverage on occupancy
costs realized from the increase in comparable store sales in both
periods and (ii) improved merchandise margins, mainly from higher
initial markups, in both periods.
The increase in general, selling and administrative expenses for the
three month period ended October 31, 1998 compared to the same period
in the prior year was due primarily to higher store expenses, higher
distribution costs and costs associated with the company's year 2000
remediation efforts. General, selling and administrative expenses as a
percentage of sales for the nine-month period ended October 31, 1998
were unchanged from the same period in the prior year.
<PAGE> 8
The company paid $49.4 million in income taxes in the first nine
months of 1998, compared to $69.9 million in the first nine months of
1997. The $20.5 million decrease in income taxes paid in the first
nine months of 1998 compared to the same period in the prior year is
attributable principally to the timing of tax deductions taken by the
company primarily related to the company's stock option plans. The
company's effective tax rate for the three and nine months ended
October 31,1998 was 39%, compared to 40% for the same periods in the
prior year.
LIQUIDITY AND CAPITAL RESOURCES
The primary uses of cash during the first nine months of fiscal 1998
were for (i) the repurchase of the company's common stock; (ii) the
purchase of inventory; (iii) the purchase of the company's Newark,
California distribution center and corporate headquarters; and (iv)
capital expenditures for new stores, improvements to existing
locations and improvements in management information systems.
Total consolidated inventories increased 9.3% at October 31, 1998 from
November 1, 1997 due mainly to an increase in the number of open
stores (350) over the prior year (326) and an increase in the level of
packaway merchandise.
The increase in accounts payable resulted mainly from a higher level
of inventory purchases over the prior year. The growth in accrued
expenses and other primarily resulted from an increase in short-term
borrowing combined with a higher level of accrued expenses compared to
the prior year. The decrease in accrued payroll reflects lower
accruals for the company's incentive plan in 1998 compared to 1997.
In January 1998, the company announced a $110 million common stock
repurchase program. The stock repurchase program was completed in
November 1998. The company repurchased approximately 2.8 million
shares for an aggregate purchase price of approximately $110 million.
The company exercised its right to purchase its Newark, California
distribution center and corporate headquarters for $24.6 million. The
company closed this transaction on June 3, 1998 with funding provided
by internally generated cash and bank borrowings under its existing
credit agreement.
The increase in long-term debt and interest expense in the third
quarter of fiscal 1998 compared to the same period in the prior year
reflects increased borrowings to finance (i) a higher level of capital
spending, which included the June 1998 real estate purchase and new
store openings, and (ii) an increased amount of stock repurchase
activity.
The company believes it can fund its operating cash requirements and
capital needs for the balance of this fiscal year and for the next
fiscal year through internally generated cash, trade credit,
established bank lines and lease financing.
YEAR 2000 MATTERS
The year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year.
Certain information technology systems and their associated software
("IT Systems"), and certain equipment that uses programmable logic
chips to control aspects of their operation ("embedded chip
equipment"), may recognize "00" as a year other than the year 2000.
Some IT Systems and embedded chip equipment used by the company and by
third parties who do business with the company contain two-digit
programming to define a year. The year 2000 issue could result, at
the company and elsewhere, in system failures or miscalculations
causing disruptions of operations, including, among other things, a
temporary inability to process transactions or to engage in other
normal business activities.
<PAGE> 9
Readiness for Year 2000
The company is addressing its year 2000 issue, including efforts
relating to IT Systems and embedded chip equipment used within the
company, efforts to address issues the company faces if third parties
who do business with the company are not prepared for the year 2000,
and contingency planning. In 1997 the company created a corporation-
wide year 2000 task force representing all business and staff units
with the goal of achieving an uninterrupted transition into the year
2000. The company is using both internal and external resources to
identify, correct, upgrade or replace and test its IT Systems and
embedded chip equipment for year 2000 compliance. Some systems
development projects not related to the year 2000 work have been
deferred from 1998 to 1999 in order to devote sufficient resources to
complete the year 2000 work on schedule.
The company uses a variety of IT Systems, internally developed and
third-party provided software and embedded chip equipment, depending
upon business function and location. For these IT Systems, software
and embedded chip equipment, the company has divided its year 2000
efforts into four phases: (i) identification and inventorying of IT
Systems and embedded chip equipment with potential year 2000 problems;
(ii) assessment of scope of year 2000 issues for, and assigning
priorities to, each item based on its importance to the company's
operations; (iii) remediation of year 2000 issues in accordance with
assigned priorities, by correction, upgrade, replacement or
retirement; (iv) testing for and validation of year 2000 compliance,
including integration testing. Phases (i) and (ii) are complete across
all business functions and locations. The company has categorized as
"mission critical" those IT Systems and embedded chip equipment whose
failure would cause cessation of store operations, or could otherwise
have a sustained and significant detrimental financial impact on the
company. All mission critical IT Systems either are currently in
phase (iv) or have been completed through phase (iv). The majority of
embedded chip equipment is in phase (iii). As of the end of November
1998, approximately 50% of the company's mission critical IT Systems
were determined to be year 2000 compliant, or replacements, changes,
upgrades or workarounds have been identified, tested and deployed. The
company is in the process of conducting a comprehensive program of
integration testing of its IT Systems in order to ensure that all
systems still work together properly and without year 2000 problems.
This integration testing began in the third quarter of 1998 and will
continue into fiscal year 1999 as necessary.
The company's operations are also dependent on the year 2000 readiness
of third parties that do business with the company. In particular,
the company's IT Systems interact with commercial electronic
transaction processing systems to handle customer credit card
purchases and other point of sale transactions, and the company is
dependent on third-party suppliers of such infrastructure elements as,
but not limited to, telecommunications services, electric power, water
and banking facilities. The company does not depend to any
significant degree on any single merchandise vendor or upon electronic
transaction processing with individual vendors for merchandise
purchases. The company has identified and initiated formal
communications with key third parties to determine the extent to which
the company will be vulnerable to such parties' failure to resolve
their own year 2000 issues. The company has received responses from
approximately 35% of key suppliers and merchandise vendors contacted.
As a follow-up, the company plans to seek to determine whether the
supplier is taking appropriate steps to achieve year 2000 readiness
and to be prepared to continue functioning effectively as a supplier
in accordance with the company's business needs. The company is
assessing its risks with respect to failure by third parties to be
year 2000 compliant and intends to seek to mitigate those risks. The
company is also developing contingency plans, discussed below, to
address issues related to suppliers the company determines are not
making sufficient progress toward becoming year 2000 compliant.
<PAGE> 10
Costs
The company estimates that its IT Systems and embedded chip equipment
will be year 2000 compliant by mid-1999. Aggregate costs for work
related to year 2000 efforts in fiscal 1998 and 1999 currently are
anticipated to total approximately $12.0 million, including about $6.0
million for capital investments in IT Systems and embedded chip
equipment, and are expected to be funded through operating cash flows.
Operating costs related to year 2000 compliance projects will be
incurred over several quarters and will be expensed as incurred. They
include $1.9 million in costs reported in the first half of fiscal
1998. In the third quarter of fiscal 1998, the company incurred $1.1
million in expenses related to year 2000 compliance, with an estimated
$1.1 million expected in the fourth quarter of fiscal 1998 and
approximately $2.0 million expected in fiscal 1999. Approximately
$4.0 million of the expected capital outlay will be incurred in fiscal
1998, with another $2.0 million in capital expenditures expected in
fiscal 1999.
The company's estimates of the costs of achieving year 2000 compliance
and the date by which year 2000 compliance will be achieved are based
on management's best estimates, which were derived using numerous
assumptions about future events including the continued availability
of certain resources, third party modification plans and other
factors. However, there can be no assurance that these estimates will
be achieved, and actual results could differ materially from these
estimates. Specific factors that might cause such material
differences include, but are not limited to, the availability and cost
of personnel trained in year 2000 remediation work, the ability to
locate and correct all relevant computer codes, the success achieved
by the company's suppliers in reaching year 2000-readiness, the timely
availability of necessary replacement items and similar uncertainties.
Risks
The company expects to implement the changes necessary to address the
year 2000 issue for IT Systems and embedded chip equipment used within
the company. The company presently believes that, with modifications
to existing software, conversions to new software, and appropriate
remediation of embedded chip equipment, the year 2000 issue with
respect to the company's IT Systems and embedded chip equipment is not
reasonably likely to pose significant operational problems for the
company. However, if unforeseen difficulties arise or such
modifications, conversions and replacements are not completed timely,
or if the company's vendors' or suppliers' systems are not modified to
become year 2000 compliant, the year 2000 issue may have a material
impact on the results of operations and financial condition of the
company.
The company is presently unable to assess the likelihood that the
company will experience significant operational problems due to
unresolved year 2000 problems of third parties that do business with
the company. Although the company has not been put on notice that any
known third party problem will not be timely resolved, the company has
limited information and no assurance of additional information
concerning the year 2000 readiness of third parties. The resulting
risks to the company's business are very difficult to assess due to
the large number of variables involved. If third parties fail to
achieve year 2000 compliance, year 2000 problems could have a material
impact on the company's operations. Similarly, there can be no
assurance that the company can timely mitigate its risks related to a
supplier's failure to resolve its year 2000 issues. If such
mitigation is not achievable, year 2000 problems could have a material
impact on the company's operations.
Contingency Plans
The company presently believes that its most reasonably likely worst-
case year 2000 scenarios would relate to the possible failure in one
or more geographic regions of third party systems over which the
company has no control and for which the company has no ready
substitute, such as, but not limited to, power and telecommunications
services. For example, if such services were to fail, it could be
necessary for the company to temporarily close stores in the affected
geographic areas. The company has in place a business resumption plan
that addresses recovery from various kinds of disasters, including
recovery from significant interruptions to data
<PAGE> 11
flows and distribution capabilities at the company's major data
systems centers and major distribution centers. The company is using
that plan as a starting point for developing specific year 2000
contingency plans, which will generally emphasize locating alternate
sources of supply, methods of distribution and ways of processing
information. The company expects its year 2000 contingency plans will
be substantially complete in the first quarter of fiscal year 1999.
However, there can be no assurance that the company will be able to
complete its contingency planning on that schedule.
FORWARD LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE
PERFORMANCE
This report includes a number of forward looking statements, which
reflect the company's current beliefs and estimates with respect to
future events and the company's future financial performance,
operations and competitive strengths. The words "expect,"
"anticipate," "estimate," "believe" and similar expressions identify
forward looking statements.
The company's continued success depends, in part, upon its ability to
increase sales at existing locations, to open new stores and to
operate stores on a profitable basis. There can be no assurance that
the company's existing strategies and store expansion program will
result in a continuation of revenue and profit growth. Future
economic and industry trends that could potentially affect revenue and
profitability remain difficult to predict.
As a result, the forward looking statements that are contained herein
are subject to certain risks and uncertainties that could cause the
company's actual results to differ materially from historical results
or current expectations. These factors include, without limitation,
ongoing competitive pressures in the apparel industry, obtaining
acceptable store locations, the company's ability to continue to
purchase attractive name brand merchandise at desirable discounts,
successful implementation of the company's merchandise diversification
strategy, the company's ability to successfully extend its geographic
reach, unseasonable weather trends, changes in the level of consumer
spending on or preferences in apparel or home-related merchandise and
greater than planned costs, including those that could be related to
necessary modifications to or replacements of the company's IT Systems
and embedded chip equipment to enable them to process information with
dates or date ranges spanning the year 2000 and beyond. If unforeseen
difficulties arise or such modifications and replacements are not
completed timely, or if the company's vendors' or suppliers' IT
Systems, software and embedded chip equipment are not modified to
become year 2000 compliant, the year 2000 issue may have a material
impact on the operations of the company. In addition, the company's
corporate headquarters, one of its distribution centers and 44% of its stores
are located in California. Therefore, a downturn in the California
economy or a major natural disaster could significantly affect the
company's operating results and financial condition.
In addition to the above factors, the apparel industry is highly
seasonal. The combined sales of the company for the third and fourth
(holiday) fiscal quarters are historically higher than the combined
sales for the first two fiscal quarters. The company has realized a
significant portion of its profits in each fiscal year during the
fourth quarter. Intensified price competition, lower than anticipated
consumer demand or other factors, if they were to occur during the
third and fourth quarters, and in particular during the fourth
quarter, could adversely affect the company's fiscal year results.
<PAGE> 12
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 that begins on page 13 of this
Report.
(b) Reports on Form 8-K
None.
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: December __, 1998 /s/John G. Call
John G. Call, Senior Vice President, Chief
Financial Officer and Principal Accounting
Officer
<PAGE> 13
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.
15 Letter re: Unaudited Interim Financial Information.
27 Financial Data Schedules (submitted for SEC use only).
EXHIBIT 15
December 11, 1998
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 nine-month periods ended October 31,
1998, and November 1, 1997, as indicated in our independent
accountants' report dated November 25, 1998; 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 October 31,
1998 is incorporated by reference in Registration Statements Nos. 33-
56831, 333-06119, 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, California
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE NINE
MONTHS ENDED OCTOBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000745732
<NAME> ROSS STORES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 26,657
<SECURITIES> 0
<RECEIVABLES> 12,212
<ALLOWANCES> 0
<INVENTORY> 511,484
<CURRENT-ASSETS> 566,724
<PP&E> 425,802
<DEPRECIATION> 185,965
<TOTAL-ASSETS> 844,400
<CURRENT-LIABILITIES> 405,766
<BONDS> 0
0
0
<COMMON> 460
<OTHER-SE> 369,827
<TOTAL-LIABILITY-AND-EQUITY> 844,400
<SALES> 1,552,390
<TOTAL-REVENUES> 1,552,390
<CGS> 1,074,466
<TOTAL-COSTS> 1,407,695
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 459
<INCOME-PRETAX> 144,695
<INCOME-TAX> 56,431
<INCOME-CONTINUING> 88,264
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 88,264
<EPS-PRIMARY> 1.86
<EPS-DILUTED> 1.83
</TABLE>
