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The earnings "beats" continue at Ross Stores (NASDAQ:ROST). The company has done a wonderful job finally delivering on the improved profitability that was expected a few years ago. Over the past year, we’ve been a big believer in the company’s ability to deliver materially greater than consensus EPS results.

But what’s interesting is that over the past few months the company’s pack-away inventory mix has materially increased versus last year. In the December 2010 sales press release, the company suggests the following: “Our merchants have been able to take advantage recently of a large amount of compelling close-out opportunities in the marketplace.”

At the end of January 2011, the company has disclosed that its inventory levels increased +25% versus sales growth of +8%. Much of this relates to “pack-away” inventory (47% of total inventory versus 38% last year).

Now the company is planning to “make supply chain investments” which includes ... you guessed it, a new pack-away facility.

Why did this increased pack-away phenomenon not occur in FY 2008? Will this strategic move be a material profitability driver next year (taking advantage of today’s pricing)? Or did the company’s merchants buy the wrong product and will the new supply chain investments become a drain on profitability?

We’re not sure anyone has the answers how this plays out in FY 2011. But ROST’s traditionally staid business model just got much more interesting this year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.