Ross Stores December Sales Results Call Transcript

| About: Ross Stores, (ROST)
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Ross Stores, Inc. (NASDAQ:ROST) December Sales Results Call January 10, 2008 8:30 AM ET

Executives

John Call - Senior Vice President, Chief Financial Officer

John Call

Good morning. Welcome to this Ross Stores pre-recorded message that provides additional information on our December sales release issued on Thursday, January 10, 2008.

This is John Call, the company’s Chief Financial Officer. This recording will be available until 8 pm Eastern Time on Friday, January 11th. In addition, a written transcript will be available on our website at www.RossStores.com through the end of January.

As a reminder, today’s press release and the recorded comments and transcript 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 and dd’s DISCOUNTS are detailed in our SEC filings, including without limitation the Form 10-K for fiscal 2006 and Form 10-Q and 8-K for fiscal 2007.

Sales for the five weeks ended January 5, 2008 were $755 million, a 12% increase over the $677 million in sales for the five weeks ended January 6, 2007. Comparable store sales for the five weeks ended January 5, 2008 increased 3% compared to the five weeks ended January 6, 2007.

For the 11 months ended January 5, 2008 sales were $5.625 billion, a 9% increase over the $5.164 billion in sales reported for the 11 months ended January 6, 2007. Same-store sales for the 11 months ended January 5, 2008 rose 1% over the 11 months ended January 6, 2007.

We are pleased with our solid performance during the important holiday period. Despite the competitive climate, customers responded favorably to the wide array of attractive and compelling bargains throughout our stores, driving better than expected sales and gross margins for the month.

The Northwest and Texas were the strongest regions with comparable store sales growth in the high single-digits. California same-store sales rose a solid 3%. Florida trailed the chain with a same-store sales decline of 1%.

The top performing merchandise categories during December were outerwear and dresses with same-store sales gains in the high teens, and shoes with a low double-digit increase. The home business posted gains in the low single-digits.

As we ended the month, average in-store inventories were down about 6% from the prior year. Packaway is estimated to be about 38% of total inventories at month end compared to 39% at the same time last year. Total consolidated inventories are estimated to be flat to the prior year.

As noted in today’s press release, based on favorable sales and margin trends quarter-to-date, we are now forecasting earnings per share for the 13 weeks ending February 2, 2008 to be $0.68 to $0.69 compared to our prior guidance of $0.62 to $0.68. Earnings per share for the 14 weeks ended February 3, 2007 were $0.66 which included income equivalent to about $0.07 per share related to the 53rd week in fiscal 2006.

On a 52-week basis, our 2007 fourth quarter forecasted range represents earnings per share growth of 15% to 17% over the prior year. Our updated 2007 fourth quarter forecast also assumes that January same-store sales are up 1% to 3%, which is in line with our prior guidance.

We plan to report January sales results on Thursday, February 7. If you have any further questions, please do not hesitate to call me at 925-965-4315; Katie Loughnot, Vice President of Investor Relations, at 925-965-4509; or Bobbi Chaville, Director of Investor Relations, at 925-965-4289.

Question-and-Answer Session

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