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Ross Stores sales up 10.1% in Q2

With sales moving up at a double-digit pace, and margins and costs both holding relatively steady, second-quarter profits at Ross Stores advanced by 9.9 percent, to $54.6 million from $49.7 million last year.

Sales at Ross Stores, the nation's 25th largest retailer of home textiles with about $152 million in home fashions sales last year, advanced by 10.1 percent, to $965.6 million from $876.9 million last year. Same-stores for the apparel and home fashions off-price merchant were flat, up against a difficult comparison with a 9.0 percent increase in the year-ago period.

Average gross margin held relatively steady, slipping by 10 basis points, or one-tenth of a percent, to 25.0 percent from 25.1 percent a year ago. Offsetting the slight margin erosion, costs were pared by an equal amount, improving by 10 basis points, or a tenth of a percent, to 15.7 percent from 15.8 percent.

Looking ahead, Michael Balmuth, vice chairman and ceo, commented, "Consistent with our long-term plan for 12 percent annual unit growth, we expect to add about 61 locations in 2003 to end the current year with 568 stores in 25 states. A total of 46 locations opened during the first six months of 2003, including our initial entry into the states of Tennessee and Louisiana."

Balmuth added, "We are also pleased to note that our new Perris, CA, distribution center is expected to open as planned in September 2003. This new facility is projected to gradually ramp up to targeted production levels by the end of 2003, as we transition our West Coast distribution function from Newark to Perris, CA. We expect this process to be complete by the end of the fiscal year."

Ross Stores Inc.

Qtr. 8/2 (x000) 2003 2002 % chg
Sales $965,610 $876,932 10.1
Oper. income (EBIT) 89,572 81,773 9.5
Net income 54,586 49,688 9.9
Per share (diluted) 0.70 0.62 12.9
Average gross margin 25.0% 25.1%
SG&A expenses 15.7% 15.8%
Six months 2003 2002 % chg
Sales 1,844,894 1,696,542 8.7
Oper. income (EBIT) 170,469 160,271 6.4
Net income 103,895 97,357 6.7
Per share (diluted) 1.33 1.21 9.9
Average gross margin 25.3% 25.8%
SG&A expenses 16.1% 16.4%


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