Ross Stores reported sales of $309 million for the four-week period ended July 31, 2004, a 2% increase above the $303 million in sales reported for the four weeks ended August 2, 2003. Comparable store sales for the same period declined 5% from the prior year.

For the 13 weeks ended July 31, 2004, sales were $1.009 billion, a 4% increase over the $966 million in sales reported for the 13 weeks ended August 2, 2003. Comparable store sales for the second quarter declined 3% from the prior year.

For the six months ended July 31, 2004, sales totaled $2.000 billion, up 8% over the $1.845 billion in sales for the six months ended August 2, 2003. Comparable store sales for the first six months of 2004 were flat to the prior year.

Michael Balmuth, Vice Chairman and Chief Executive Officer, stated, “Our information system issues and the limitations they place on our ability to fully identify and respond to changes in customer trends — especially in what appears to be a more difficult retail climate — have continued to adversely impact sales.”

“During July, we made further progress in remedying the problems associated with our new Core Merchandising System. The allocators continue to get the normal amount of visibility into in-store inventory assortments, and many of the information needs of our buyers are now being met, including regional trending, in-store turns, pricing and unit data. We expect the balance of the information requirements most important to the buying process to be addressed by the end of August. Although we believe our business trends will gradually improve once the Core Merchandising System issues have been remedied, we do expect some residual impact to sales and earnings during the second half of 2004 as we cycle through merchandise imbalances created by these system issues,” said Mr. Balmuth.

Mr. Balmuth continued, “Based on our July sales results, we now estimate that earnings per share for the 13 weeks ended July 31, 2004 will be at the low end of our prior forecasted range of $.22 to $.23, inclusive of the previously-announced non-cash charge of $.07 per share in the second quarter related to the write-down of the Company's former corporate office and distribution center in Newark, California. Earnings per share for the 13 weeks ended August 2, 2003 were $.35.”

Looking ahead to the second half of the year, following a recent review of its business, the Company now projects the following same store sales and earnings per share ranges for the balance of fiscal 2004:

For the third quarter ending October 30, 2004, the Company expects same
store sales to be down 1% to 4% on top of a 2% gain in the prior year
and earnings per share to be in the range of $.25 to $.30, compared to
$.33 earned in the third quarter ended November 1, 2003.

For the fourth quarter ending January 29, 2005, the Company expects
same store sales to be flat to down 3% on top of a 4% increase in the
prior year and earnings per share to be in the range of $.44 to
$.49, compared to $.48 earned in the fourth quarter ended January 31,
2004.