This summary is based on the fourth quarter fiscal 2005 earnings call conducted by Ross Stores, Inc. (ROST: chart) on March 15, 2006.

Key Investors Issues

- Net earnings for the 13 weeks ended January 28, 2006 increased 37% to $71 million, compared to $51.8 million for the 13 weeks ended January 29, 2005.
- Earnings per share for the 13 weeks ended January 28, 2006 grew 40% to 49 cents, compared to 35 cents for the prior year period.

- For fiscal 2005 ended January 28, 2006, net earnings totaled $199.6 million, and earnings per share were $1.36, compared to net earnings of $169.9 million and earnings per share of $1.13 for fiscal 2004 ended January 29, 2005.

Fourth Quarter Fiscal 2005 Financial Highlights

Fiscal 2004 results include a non-cash pre-tax charge of approximately $15.8 million, or 6 cents per share, to write-down the value of the company''s former headquarters and distribution center in Newark, California to its estimated fair market value.

Sales for the fourth quarter ended January 28, 2006 increased 16% to $1.411 billion, with comparable store sales up 6% over the prior year. For the 2005 fiscal year ended January 28, 2006, sales rose 17% to $4.944 billion, with comparable store sales up 6% over the prior year.

The Southwest was the strongest region for both the fourth quarter and the fiscal year.

In the company’s most important state, California, comparable store sales increased 4% for both the fourth quarter and the year.

Juniors and Shoes were the top performing merchandise departments for both the fourth quarter and the fiscal year.

Same-store sales for these businesses were consistently up in the mid teen to low 20% range throughout the year.

The earnings growth in the quarter was driven by a combination of strong sales gains and a 115 basis point expansion in operating margin.

- Gross profit margin for the quarter rose about 185 basis points, partially offset by an approximate 7 basis points increase in selling, general, and administrative expenses, mainly related to higher incentive plan costs.

For the full year, earnings benefited from a solid rebound in sales, partially offset by a combination of:

- Higher than expected markdowns related to transitional systems and distribution issues earlier in the year;
- Higher expenses related to inventory shortage in the second half of fiscal 2005;
- Higher incentive plan and information technology costs compared to a year ago.

The average in-store inventories were relatively flat to the prior year on a comparable store basis.

- Total consolidated inventories increased 10%, driven mainly by the growth in new stores, partially offset by lower levels of packaway inventory.
- Packaway was about 41% of total inventories at the end of January 2006, compared to 43% at the same time last year.

dd''s DISCOUNTS Store Sales

All at every day discounts of 20% to 70% off moderate department store and national discount store prices. During 2006, the company plans to open another six locations for a total of about 26 dd''s DISCOUNTS stores throughout California.

Operating cash flow during 2005 continued to provide the resources to fund capital investments in new store growth and infrastructure.